Right Turn: The UAW Moves In for the Kill

December 19, 2008
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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