Bailout Watch 236: UAW "Concessions" Are a Sham
The United Auto Workers (UAW) brought all its chairmen and presidents of Detroit 3 locals together in Detroit yesterday for an “emergency meeting.” Translation: a publicity stunt to show the politicians in Washington that the union’s part of the solution, and not the problem. (Well, actually the unions were part of the problem, but that’s managements fault for giving in to union demands decades ago.) Afterwards, Big Ron told everyone that the UAW will “suspend the JOBS Bank” (money for nothing and your checks for free) and delay the VEBA funding payments (XXXL lootable health care fund). Woohoo! One slight problem: we still don’t know the truth about the “concessions.” All we know is that the 2007 contract won’t be re-opened, just slightly modified. In other words, fuhgedabout any major revisions JOBS Bank (your money for nothing and your checks for free) suspension might mean that the language in the contract stays, just that Big Ron will suspend it for a week or a month or until and unless Detroit gets a bailout. Yeah, big savings there. Not. And the delated GM payment into the health care VEBA superfund? Ok, fine. Detroit can make the payment later into the Mother of All Lootable Bank Accounts. But in the meantime, Detroit still must pay retiree healthcare in 2010 and beyond– until it can make the payment. So it’s just like before: an expensive drag on earnings. And yet the press is abuzz with talk of “concessions.” Fool them once…
More by Ken Elias
Comments
Join the conversation
The concessions from the UAW were true concessions, but they were just an opening stance in negotiations as far as I'm concerned. The same UAW that said two weeks ago that they felt that they had already done enough to help the D3 have now done more. And Ford, GM, and Chrysler are counting on them to give more back. Considering that these concessions were not bargained - the companies didn't have to give anything up to get them from the union - I'm sure there will be more going forward, but other ones will have to be bargained for - "OK, we'll cut wages, if you give us __." The UAW clearly chose these two items because they have no impact on the active membership and are therefore most palatable to those members.
The big one is wage concessions by current workers--and it supposedly was not discussed. The real sham is thinking that the current contract will have real savings in 2010. It would have, if car sales had kept chugging along. But the lower wages apply only to new hires, and it's not looking like anyone will be hired to replace the workers everyone expects to retire.
The UAW has learned from GM how to make it appear that there are actual savings being realized. My 19 month old can draw more coherent sketches than the UAW can draw up cost savings.
Well, Mr. Gettelfinger certainly showed his fear of any kind of bankruptcy proceeding in his opening remarks to the banking committee. Obviously, he doesn't want anyone with authority to go in and change contracts, VEBA, jobs bank, or anything else necessary to get Detroit back in business in a sustainable way. I hope our lawmakers can just do the right thing and get these guys into bankruptcy where they can sort out what really needs to be done to make them viable.