Tuesday, December 23, 2008

The UAW’s Bailout Deal – Sacrifice or Surrender?

Is it sacrifice or surrender?

And is it a sign of things to come, for other workers across the country?

The recent Auto bailout has come with some hard-to-swallow terms. According to reports,
“The $17.4 billion federal loan agreement does keep the domestic auto industry alive. But the terms of that loan also insist that the wages and benefits for union workers be lowered to "equal" the average of nonunion workers, specifically, those at the U.S. plants of Nissan, Toyota and Honda."

The fact is, that there are ONLY TWO possible solutions to America’s domestic auto crisis; (1) either the UAW shops have to be coerced into working for the same $50/hour wage, health and pension package as the non-Union Toyota, Nissan, and BMW shops, OR, (2) all those non-Union shops have to be either coerced OR tariffed/taxed into paying the same amount for THEIR labor. OTHERWISE the UAW shops will NEVER be able to compete.

The language of the current loan agreement is clear in that it sets a number of specific "restructuring targets" that General Motors and Chrysler must use their "best efforts" (whatever THAT means) to meet. Compensation must be made "equal" to the nonunion workers, and work rules must be "competitive" with those at nonunion plants. The companies also must reduce compensation to workers who have been laid off — the jobs bank and at least half of the company's payments into retiree health care must be made in stock, not cash.

Can this agreement be made to work?

We’ll see by March, when the “loans” come due and the Big Three will certainly come begging for more.


Alpha Conservative Male said...

I know one thing jmk, I'm more inclined now to buy a foreign car then ever before. The gull of the UAW ticks me off to no end. Now that the spin less President caved in and gave them "the first round" of money, notice how the UAW now says it won't make any concessions now!!Bush should have come to grips that his "legacy" is already trashed, and bailing out Chrysler and GM isn't going to make it any better.

JMK said...

I don't know what to think about Bush Jr., after his putting Henry Paulson (a longtime Liberal Democrat supporter) in charge of the TRILLION DOLLAR "credit bailout."

I think at this juncture, he just doesn't want to see the American auto industry go into receivership under his auspices.

Yes, it's crazy as THAT is really the ONLY way to force the UAW to accept concessions by, in effect, scuttling the UAW - car companies in Chapter 11 = no UAW.

The problem I see is that all these "restructuring targets" imposed on General Motors and Chrysler are mandated upon their "best efforts"....which provides an easy OUT for them and a loophole for the UAW large enough to drive a Hummer through.

Alpha Conservative Male said...

When I found out that the UAW owns a golf course, my blood really got boiling jmk. I mean really!! At this point I can give a rats behind about the big three. Any sympathy I had for the domestic auto makers is all gone. They aren't willing to make the necessary changes to save their jobs, then I wash my hands with them.

JMK "I don't know what to think about Bush Jr., after his putting Henry Paulson (a longtime Liberal Democrat supporter) in charge of the TRILLION DOLLAR "credit bailout.""

Speaking of Paulson, I heard the maggot is going back to Goldman Sachs in January. So Paulson drummed up the panic of the need to create a TARP fund, he used the fund not to buy up bad subprime loans, but to give bailouts to his wallstreet buddies including $37 billion to Goldman, and now he's going back to Goldman with the subprime mortgages still on the bank's books and the problem now worse then when it requested the money in the first place. I think all of that says as Americans WE GOT SCREWED ROYALLY BY PAULSON jmk!!

JMK said...

Here's the thing Tyrone, the UAW doesn't really speak for all its members. Most Unuions don't.

They're political organs that seek political favors, even, and very often, at their worker-member's expense.

We've moved so far from the abuses of Big Labor in the 1960s and early 1970s that most Americans forget how bad that period was....millions of companies closed down and those jobs lost and never recovered. In NYC there were over a dozen vibrant newspapers back then, UNTIL various Unions insisted on "Pattern Bargaining," which forced smaller newspapers to pay the same salaries as the NY Times and the Daily News, resulting in the disappearance on many newspapers and tens of thousands of good jobs that went with them.

That was just ONE of the abuses of Unionism....and there's fear that with "card check" (stripping workers of the secret ballot) we could see a return to those days.

As for G. Bush Jr., he has benefitted greatly, perhaps excessively from just TWO Supply Side things he did - (1) cutting the Cap Gains rate from 20% to 15% and (2) cutting income tax rates across the board...BOTH those things greatly increased tax revenues.

I've always been leery of tax cuts to boost reveneues, as it still seeks money for government expansion - leading us in the wrong direction.

Gingrich was the ONLY political figure to effectively REDUCE government spending (in the late 1990s), but the fat porker (government) couldn't wait to shed that diet and it has BIG TIME!

Bush has been terrible on illegal immigration, hideous on government over-spending and he failed to even define the enemy in the WoT properly or even adequately!

Bush Jr has cooperated as well with the Keynesian Pelosi-Reid Congress as Clinton did with the Supply Side Gingrich Congress. Bush's affection for Keynesian policies (his Dad was a big Keynesian supporter who derided Supply Side policies as "Voodoo Economics"), has helped get us into the mess we're in.

Ironically enough, there was no Gingrich on the horizon in 2008, so it came down to a race between yet another Keynesian Republicam (McCain) and a Liberal Democratic Keynesian (Obama)....and why not vote in the purist Keynesian, IF you're going to get Keynesianism either way?!

I do ultimately see a Carter Redux in America's near future...but we'll see.

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