Bailout Watch 250: Sound and Fury
This is the week that the CEOs of Chrysler, Ford and GM make their second attempt at securing enough bailout bucks to stave-off bankruptcy (Ford not-so-much, but since you’re offering…). As is the way of such things, the serious “negotiations” is already going down, as politicians and supplicants prepare to posture for public presentation. Automotive News [sub] reports that Republicans have decided to focus their hypocritical ire (imagine a politician chastising an automaker for not balancing their budget) on the United Auto Workers’ (UAW) Jobs Bank. “The Jobs Bank requires the Detroit 3 to pay nearly full wages to hourly workers who have been laid off. Although the number of workers in the Jobs Bank has dwindled, the concept has become a powerful symbol of auto industry excess. General Motors is likely to propose its elimination, says a source familiar with the company’s thinking. Last week Bond did not spell out precisely which concessions he expects from the UAW. But during the congressional debates, many GOP lawmakers singled out the Jobs Bank as a wasteful Detroit 3 practice.”
Don’t be fooled by the pro’s prose. Either GM’s already cut a deal with the UAW to kill the Job’s Bank, or it hasn’t. And if it has, you can bet the UAW didn’t ask for something in return– something which will NOT be the subject of public debate or disclosure (the joys of having a public turnaround plan and private for-pols-eyes only plan).
“The enormous costs in union-required benefits are unsustainable,” said Sen. Elizabeth Dole, R-N.C. “Renegotiating these contracts would be essential if there were to be hope of keeping these companies afloat.”
What’s the bet the automakers’ suits will throw the UAW’s recent “historic accord” (Daniel Howes) under the proverbial bus? And why not? As many TTAC commentators have pointed-out, the UAW’s compensation is hardly the central reason for The Big 2.8’s slide into bankruptcy. But it’s a lot better for the D2.8’s chiefs if Congress focuses on the union– rather than the CEO’s epic mismanagement on the branding, product development, manufacturing, planning and marketing fronts.
In fact, Jet-gate may set the template: a class war between the haves and the have-mores, with a sideshow of SUV bashing. Politics. You gotta love it.
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