From the Associated Press:
The United Auto Workers union would appear to be the big winner in the Chrysler bankruptcy saga, having exercised its considerable political muscle to win a 55 percent stake in the country’s third-largest automaker.
You win …a company that you’ve helped run into the ground. I so wish President Bush had been a less compassionate Conservative and let the UAW’s house tumble around them. Sure, the union bosses wouldn’t be the ones getting screwed, but a few more years’ union dues later and most of the hourly employees will be out of work anyway. The lifeline Bush threw was long enough that now President Obama gets to act tough about saving us money while arranging juicy deals for the UAW and framing poor fuel economy as the reason for all woes.
On the bright side, the German and Japanese carmakers can hire more American workers using all the advertising money they no longer need to spend. With 2/3 of domestic manufacturers run by the unions and the federal government, competition won’t exactly be at an all-time high.
The slow demise of General Motors (GM) is visibly intertwined with the inefficient labor contracts that the United Auto Workers (UAW) secured in decades past. Regular media stories showcasing problems at GM and Delphi send a potent signal to other U.S. workers that big labors ideal business model is a bust.
Then again, who knows. Maybe after the Democrats have tackled universal healthcare they can implement a program where the wealthiest 2% pay another tiny slice of their pie so every American gets a new Government Motors car every couple years. Sounds crazy, but the union’s earned it! The UAW has paid over $2,000,000 to Democratic candidates in each of the last ten election cycles.
From the original AP story:
The UAW started making concessions during 2007 contract negotiations and that helped in negotiating the stakes they stand to gain now. At the time, both GM and Chrysler had huge labor cost disadvantages compared with Japanese automakers, mainly because they have far more retirees and had agreed to pay their health care bills.
For GM, the health care tab is projected to total $46.7 billion over the lives of about 350,000 retirees and spouses. At Chrysler, it’s $10.9 billion for around 82,000 retirees.
The UAW pushed GM and Chrysler towards bankruptcy to score political points and maintain control of their constituents by “guaranteeing” unsustainable benefits. Hmm…. why does that sound so familiar?