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Right Turn: The UAW Moves In for the Kill

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UAW contract

UAW contract

This morning's $13.4 billion giveaway to the UAW by the Bush Administration wasn't so much a rescue for Detroit, as it is a time-out in the Big Three bailout drama--and a way for the UAW to escape the right-sizing haircut it deserves.

In the space of a day, the story's gone from a sitcom to an episode of Law and Order. The time-out gives the United Auto Workers (UAW) exactly what it wants, or thinks it wants--a way to delay job, wage, and benefit cuts until President Obama gives them a much more sympathetic offer.

So, UAW, here's your last chance to kill off Detroit, for once and for good. All you have to do is hold out for a better deal.

Wait until January 20 before you sign on for any kind of talks to access the loan money. You'll have balked your way into a stalemate that only the new president will be able to fix. How he'll fix it--since he owes organized labor so much already--will be to pump even more money into the uncompetitive business model you want the rest of us to subsidize.

Sure, it's an epic game of Risk--but you've played that all along. What's another few weeks? Force President Obama into an inauguration-week meltdown meeting and hold him up for more federal taxpayer cash.

You already know he's your guy; today, he said, "The auto companies must not squander this chance to reform bad management practices and begin the long-term restructuring that is absolutely required to save this critical industry and the millions of American jobs that depend on it." That's calling the game in your favor before it's even started.

There's a big downside to your position, though--the very real possibility that either GM or Chrysler will say to hell with the national economy and file bankruptcy just to get you off its back. In Chrysler's case, you can count on bankruptcy being a Chapter 7, with assets like the Ram and the minivans being fire-saled to whomever can afford them. In GM's case, it'll lead to an epic heart attack in the car market that will take down dealers and suppliers, open the door wide for Japanese and Korean companies to snatch market share, and yes, take even more of those UAW jobs along with them.

That won't happen with President Obama. For sure, he'll inject more cash into the current cost structure, fire today's best automotive leaders (Wagoner and Mulally), and make the union card-check rule the law of the land. He'll practically help you do your job for you! That is, until the car companies need a second and third round of cash, the American taxpayer rebels, and your jobs are gone for good. It's be a slow, ugly death, but what's another five years on top of 30 years of a downward spiral?

While we all work at our jobs, happy to have them in this depressing year, it's good to know the UAW folks are so secure in their ability to turn out world-class products that they're willing to bet the entire American auto industry and economy on 18 months of benefits none of us outside of Congress can claim.

Michigan's Congressional "team" are already hitting up Obama to lighten up on the loan conditions. So what happens if that happens, and two years from now the UAW is back, asking for more freebies? Term limits, I hope.

If this is an orderly restructuring, I'll take disorder and chaos anyday.

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Comments (6)
  1. If you want to fix this mess once and for all- fix what is killing all American Industry- our private healthcare mess. The UAW that you defame so much in this screed will be seriously affected by having their VEBA's funded in stock instead of all cash.
    Better solution is to put them all under a version of HR 676, Conyer's healthcare bill- this will immediately cut units costs and get Detroit's focus back on making cars not picking the least onerous health insurance plans.
    Detroit is just the 'canary in the gold mine' hitting the economic crash barrier firstdue to legacy costs- all our other industrial jobs are right behind.
     
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  2. I think that the idea behind the "bailout" money and the requirements that go with it is to set the auto companies up to fail. That way, when March 31st comes around and no progress has been made, the government, under the democrats, can step in, fire people like Mulally and Wagoner, and put in leadership of their own, people who are partial to both the unions and to "saving" the environment. You are spot on that the main idea is to save millions of jobs, not the companies who employ them. Unfortunately, trying to save these jobs that the markets say should not be there is never ever going to work and throwing money at the issue is not going to solve anything except to make things worse!
     
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  3. There's Geoff and the healthcare bogeyman again. We have to socialize or it's doom for industry! How about we don't and rely on the system that's worked for decades?
     
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  4. There are a lot of people who would argue with you Marty on your claim that our health care system has "worked for decades".
     
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  5. There's not enough money to fund health care reform now. And the UAW members will not like the modest benefits that a public plan is going to provide.
    Yesterday, Bush was talking tough about the pre-packaged bankruptcy, today he punted.
     
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  6. Marty: You and I can have the healthcare discussion offline or leave it alone.
    But I'd point out that as an independent operator in New York State--which at least requires insurance companies to *offer* policies (at whatever price) to individuals, which many states don't--I am now paying $1,180 a month for a not-very-good plan.
    That'll come down to $500 and change once I join Freelancer's Union. Yes, a union. At my age, I am finally having to join something called a union in order to get the benefits of collective bargaining. (Don't get me wrong; I love Freelancers Union and they do a fantastic job for their 70K members.)
    In other words, while the system may have "worked for decades" (note your use of past tense), it sure as sh!t ain't working for individuals who DON'T have corporate jobs that come with health-care benefits. And as is pretty obvious, those jobs are a smaller and smaller portion of the total job pool.
    If you think our current health-care system is working for me, I invite you to write the checks. And I'm one of the lucky ones; I can afford to do that. The minimum-wage families can't.
    End of rant.
     
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