UAW blows up Big Three 'rescue'

Who's to blame for blowing up Detroit's Big Three $14 billion bipartisan rescue plan in Congress?


So-called progressive pols and pundits are echoing Michigan Democrat U.S. Sen. Debbie Stabenow's charge that stubborn conservative Senate Republicans are to blame.

Don't believe it.

The plan was blown up by the stubbornness of the United Auto Workers -- aided and abetted by Senate "progressives" determined to shield the union from making some very tough wage and benefit concessions that could make the Big Three competitive with foreign auto manufacturers located throughout the South.

After unprecedented marathon talks between leaders of the auto industry, labor, bond holders, lawmakers, and the Bush administration, all the contentious issues that had been separating the various sides had been resolved, including that the UAW would make the necessary concessions to be competitive.

The hang-up was that the UAW would only commit to making promises of concessions -- but not until 2011 when contract negotiations are scheduled to be reopened. Promises were not enough for most GOP senators -- and they were absolutely right.

One did not have to be a genius to know what the union and their progressive allies were up to: Make promises now to get that $14 billion "bridge loan" approved and then soften the tough terms when the new, heavily Democratic Congress and Obama administration take over Washington next month.

Republicans understood that if the bipartisan bill was to work, it would have to include benchmarks, not promises. Benchmarks would be harder to renege on than promises, because new legislation would be required to repeal them.

Under the leadership of Sen. Bob Corker of Tennessee, the GOP got benchmark concessions on every outstanding issue, except the labor issue. The UAW would not commit to a date certain next year to make its wages and benefits competitive with what the union calls the foreign "transplant operations." And without those UAW concessions, there weren't nearly enough votes for Democrats to break a Republican filibuster.

What Corker was seeking was a "prepackaged bankruptcy"-- in other words, the harsh, demanding kind of corporate and labor restructuring required of companies under Chapter 11, but without the PR taint of labeling it a bankruptcy.

Clearly the Corker plan was superior; even Senate Majority Leader Harry Reid, D-Nev., indicated it would probably pass overwhelmingly if senators voted on it. But the UAW would have none of that. So the Senate voted on a weaker measure that went down in flames.

And now General Motors and possibly Chrysler LLC could go into Chapter 11 before month's end. Some of us think that'd be just fine.

For those who think Republican senators were being too hard on union workers, consider that the primary purpose of the rescue was not to save jobs at current wage-benefit levels, but to make the Big Three competitive with their foreign rivals.

That's impossible when the transplants' wage-benefit packages average about $48 an hour and the Big Three's average about $73 an hour. This differential automatically makes U.S. autos $2,000 more expensive than their competitors.

There's also a little matter of fairness to consider. Workers making less than $70 an hour should not be forced to subsidize, through their taxes, the wages of workers being paid more than $70 an hour.



Thu, 11/23/2017 - 17:01

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