U.A.W. in Center of Dispute Over Bailout Failure - NYTimes.com

U.A.W. in Center of Dispute Over Bailout Failure - NYTimes.com

Reading between the lines:

DETROIT — Opponents of a Congressional bailout for Detroit auto companies and the United Automobile Workers union traded charges Friday over who was responsible for the defeat of legislation that would have provided temporary financing until the automakers restructured....

Mr. Gettelfinger called on the Treasury and the White House to release financing and “prevent the imminent collapse of the automakers and the devastating consequences that would follow.” Until now , the White House had resisted such a move, but said Friday morning that it would consider using money from the $700 billion financial bailout to help the automakers...

I don't believe they have the authority. That would imply a pretty loose mandate by Congress about the funds. Congress is already pretty pissed about how the Treasury used money.

"I need $750 billion to buy mortgage backed securities. The financial system is failing!"

"Thanks"

"Oh, I changed my mind. I'm going with the capital infusion program."

"Oh, I actually didn't need $750 billion. But you can't have the money back"

"Oh, we'll use the rest to bail out the auto-industry. F*** your decision."

...But the cuts did not affect most long-time union members, whose hourly pay and compensation is about $55 an hour. The figure ranges above $70 an hour when the automakers’ costs for future health care and retirement benefits is factored in.

Egads, $55 an hour. Though I do support the whole "paying the pension you promised the worker when you hired him" you can still cut that down. DO YOU HAVE A PENSION?? Those things are NICE. Originally created to compensate for the wage differential between workers (lower paid but get a pension) they're useless now, as the wage differential is like zilch. In fact, it's -$10 for a unionized autoworker.

By contrast, workers in plants run by foreign companies in the United States earn about $45 an hour, and the non-union companies do not have the hefty burdens for future “legacy costs” that are faced by the Detroit companies.

Turns out the competitive market actually does work... unfortunately, it's the Japanese that are winning. It's all good for free markets and such, until we LOSE. Fortunately (unfortunately for us) markets have a way of adjusting, unfavorably.

On another point, the bankruptcy option would have allowed the auto companies to renegotiate their union contracts. I suspect they really don't care that much if they're bailed out. I suspect that, that these extended loans won't do much because the money is essentially subsidizing the wages of the autoworker, in an already non-competitive industry, not going into capital investment with returns. (You don't get much (ANY) return from labor if you're overpaying somebody). They will still probably go bankrupt. Then what will we have?

Gov. Jennifer M. Granholm of Michigan expressed anger Friday morning at the failure of the Senate to act on the bailout package. “It’s such an unbelievable stab at workers across the country,” she said in an interview on WJR-AM in Detroit.

Express that anger for the cameras. They love it.

Washington gave a bailout to the financial institutions, and did not ask a single question, the governor said, “then lay the blame for the auto industry, which is a victim of this financial meltdown, on the backs of the people who are working on the line.”

No, you're wrong. The situation is different. The money was used to back liabilities on a bank's balance sheet. While I may not agree with that, it WAS NOT used to subsidize inefficiently paid workers and poor business practices. Theoretically, that money would be lent out again, providing credit to all us taxpayers to buy our BMWs and, perhaps, even GM's. The only people who would'nt have benefited were people who don't use credit or banks. A bailout to the auto industry only benefits those directly involved in that business, perhaps some benefits acrue to those who wouldn't have to compete with laid off workers. However, it's not as if I would be discomfited if I had to buy a Toyota instead of a Crysler.