UAW: Why Not?
Published: April 30th, 2009
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Reuters reports that the UAW membership has “overwhelmingly approved” its deal with Chrysler, paving the way for union ownership of the firm. So it’s fair to say that Obama’s “what we’ve seen is the unions have made enormous sacrifices on top of sacrifices that they had previously made” line sent the right message?
More by Edward Niedermeyer
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This article sums up my fears. When the 'new' company implodes, the Gov't will just prop it up again in a effort to Double Down on it's 'investment' Fair Use Extract The UAW in the Driver's Seat Whether the union's rank and file will recognize its interest in the companies and act accordingly is another matter. Consider that one of the terms of Chrysler's pending deal with the union is that workers won't receive overtime pay until they work more than 40 hours in any given week. One might well ask: Wasn't it always that way? Well, no. Often enough, the union negotiated production quotas in local plant contracts that workers could fill in five or six hours a day -- after which any work they did qualified for overtime pay. Now you understand one key reason why Detroit has arrived at this unhappy juncture. It's hard to imagine the mind-set that produced this sort of thing will change just because the workers will become the owners, albeit indirectly...... There's an inherent conflict between the cost discipline required of owners and the understandable desire of employees to make more money for less work (hey, why not?). Keeping those two powerful forces in balance is critical to the success of any profit-making -- or profit-aspiring -- private enterprise. Even a clean and well-run union such as the UAW will have trouble squaring this circle in the long run.
So, here's what I'm seeing. Chrysler will be owned by a trust fund set up by UAW for the purposes of paying benefits. I'm assuming, then, that this trust will be responsible for all benefits. Can anyone confirm this?
According to the article, UAW will be responsible for its own benefits after the bankruptcy. Part of the deal to C7 is to allow Chrysler out of half of the medical benefits still owed, but will have to cough up the remainder.
In my city's downtown we have a big hulking development that's the result of our Redevelopment Agency. All nice and neat not to mention expensive. The thought was that this mixed use development would be a hub of economic activity and source of jobs. Only trouble is that after years it remains only about 30% occupied. I wonder if the Federal role in the auto industry will produce similar results. We'll have the "appearance" of a car company along with "show" jobs but ultimately it'll be a ongoing drain on the Treasury versus a source of authentic revenue.