Monday, December 08, 2008

Don't Bail Out the UAW

It seems to me that the auto company bailout is not bailing out the companies at all. And it's not bailing out the "automobile manufacturing industry", because there are plants elsewhere in the USA that are making foreign brand cars. No, what's really being bailed out are the United Auto Workers.

If the three big fail--go to either chapter 11 or chapter 7 bankruptcy, who loses the most? Obviously stockholders will lose something, but the stock prices are so low now, who would loose much more than they already have? The corporate executives will lose posh jobs, and have to live off the millions they have banked over the years. But Congress historically has not cared for either one of those, especially a Democrat party dominated Congress. If the Big 3 companies go to bankruptcy, and they can’t come out from under it, they would shut down. Those who would have bought a GM, Ford, or Chrysler car will have to buy another. Most likely it will be a foreign brand car built in the USA. Detroit's loss will be Tennessee’s gain. The plants of the companies not affected by the bankruptcies will go to three shifts, maximum production, and might be glad to have those Detroit workers for half the money and benefits.

No, this bailout is for the United Auto Workers, who have pushed their companies over the years to this point. I grew up in a union household, and have seen it at work. The unions push, push, push for the highest possible wages, thinking only of the next twelve months, not the long-term viability of the company they work for. They unions push, push, push for the absolute best benefit package they can get, including retirement benefits. While this has the appearance of being concerned about the long-term, it is really a mentality of "what is the most I can get at this moment?" mentality.

The bailout is being couched in terms of bailing out the companies, but make no mistake: the Democratic dominated Congress cares nothing for those companies. But if the companies fail, the union idiocy will be exposed.

Not that stockholders and the management they hire is much better, always thinking of the next quarter, never considering the projections for the future and the corporate long-term viability. But it’s the union that stands to lose the most. All those current jobs, although I don’t think that is the real issue. It’s the many retirees, now living off their collectively bargained retirement pay. If the companies go under, all those retirees will have to live off Social Security, and the UAW idiocy of pushing for higher salaries and benefits than the long-term market could bear, will be exposed.

This bailout is also the government covering its own sins. Its sins of regulation creep, which each year sees more regulations piled on an industry that has been sinking. Its sins of believing the unions were doing something good for their workers and the nation. Its sins of mishandling banking regulation and deregulation. Both the Executive Branch and the Congress are at fault. If they let the Big Three fail, they will be found partly culpable for the failure. Right alongside the United Auto Workers.

No bailout for unions. No using my tax dollars to hide the government’s sins.

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