Bailout Watch 139: UAW: "Give US the G.D. Money"

by Robert Farago

November 2nd, 2008 9:56 PM

bailout watch 139 uaw give us the g d money

Gooooooooood morning U-A-W! In case you were wondering where the United Auto Workers stood during this, Detroit’s End of Days, we can now report [via Reuters] that the union is, finally, bellying-up to the billion-dollar (for a start) bailout buffet. “Alan Reuther, legislative director of the United Auto Workers, said in an interview that the group is proposing lawmakers approve up to $25 billion in new loans for General Motors Corp, Ford Motor Corp and Chrysler LLC. Reuther said the aid would cover pledged contributions to a retiree health care trust, the Voluntary Employees Beneficiary Association [VEBA], which was negotiated last year with the companies.” As odd as that sounds, the UAW bailout bypass makes a certain amount of sense– if a bailout it must be. If the automakers’ call on the public purse is designed to protect jobs, jobs, jobs, why not call their bluff? Or not. “If the companies get the assistance that makes it easier for them to do other things,” Reuther said. “I think the financial markets would look at that and say that helps lift a significant liability and that’s a good thing.” “Other things?” Such as… build cars people want to buy at a price that will make GM enough profit to pay off all its debts and liabilities? Good luck with that.

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Sitting@home on Nov 02, 2008
They have a point. Should the Big3 go belly up, there will be no VEBA contributions and all those UAW workers will be S.O.L. I agree that VEBA should be considered as part of the bailout bucks. So basically you're saying the taxpayers should fund GM retirees healthcare ? I know the UAW negotiated the benefits in good faith, but their failure was not to get any of it funded up front and instead relied on the fragile scenario of GM existing and being profitable for all eternity. Even agreeing to allow GM to use stock as part of the VEBA was stupid, because it's future value is never certain. Any bailout should be loans to get the manufacturers manufacturing efficiently again, not to pay off liabilities and promises that could not and should not have been made.

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Derm81 on Nov 02, 2008

Look, when your fricken janitors start earning $80,000 a year then you know you have problems.

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Br549 on Nov 02, 2008

I can't help but find it laughable when some are concerned about $80k janitors when avg. fortune 500 executive comp, is over 14 million. BTW, check out Toyota's blue collar wage structure. It's not that much less.

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RobertSD on Nov 02, 2008

Toyota's blue-collar wage structure isn't that much lower... but Toyota's liabilities are well controlled because there is no union to demand pensions or retirement health-care. Since the last negotiations that established the VEBA route, Detroit's wages have come closer to parity. I don't think spending the money on the VEBA would be nearly as bad as on a GM-Chrysler merger. At least someone benefits as opposed to no one benefiting.

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