Rescue automakers, not unions

In order to prevent further serious erosion of the nation's manufacturing base, the government may have to spend another $25 billion of taxpayer money to rescue the Big Three automakers from bankruptcy.


But only if they develop a viable business model to survive and prosper.

In testimony before Congress this week, they failed to do that.

Moreover, Democrats seemed more interested in roasting the CEOs and rescuing the unions than preserving the companies -- more concerned with preserving union benefits than the jobs that provide them!

General Motors says without a taxpayer loan now, it could run out of money before year's end. No wonder. GM shells out to its union workers an average of $73 in hourly compensation -- wages plus fringe benefits -- compared with $47 for Toyota and other foreign car firms with plants in the United States. If that huge gap in labor costs cannot be closed, there's no way the Big Three can return to profitability.

Yet, here's what Democrats urged in the way of a rescue package: production of more fuel-efficient cars; executive compensation not to exceed $250,000; suspension of dividends to shareholders; warrants to taxpayers. Not a word about reducing labor costs or downsizing the labor force.

And here's what UAW President Ron Gettelfinger says the company's focus should be if the emergency $25 billion taxpayer loan comes through: to enable "auto companies (to) meet their health care obligations to more than 780,000 retirees and their dependents."

Yes, in the UAW view, a manufacturer exists to provide benefits, and taxpayers should make good on the poisonous pension packages the union wrung from management that are now driving the Big Three toward bankruptcy.

Gettelfinger doesn't care if U.S. automakers make money as long as UAW jobs are kept afloat on the taxpayers' dime.

Columnist George Will says congressional Democrats' priorities vis-a-vis a taxpayer rescue are, in numerical order, preservation of union jobs, environmental mandate for more fuel efficient cars and, lastly, a return to profitability. These goals are incompatible and irresponsible.

Don't be taken in, either, by talk that Uncle Sam made a profit on the taxpayer rescue of Chrysler in the 1970s. True, but labor underwent some very painful restructuring then that the UAW has shown no appetite for this time around.

We're for rescuing U.S. auto companies, but we're totally opposed to bailing out unions. Better the companies go into Chapter 11 bankruptcy. The courts could then compel UAW to downsize its work force and slash its overly generous compensation packages.

One of the worst results of this month's election is the increased special-interest clout Big Labor gained by helping to get large Democrat majorities elected to Congress.

The timing couldn't be worse for a resurgence of Big Labor. Notably, its dominance is most strongly felt in public education, government and U.S. auto making -- all three of which are bending under the weight.

Throwing money at the status quo would be insane.



Sat, 11/18/2017 - 23:00

Editorial: Our common ground