I just strolled outside and picked up my edition of todays WJS and read this headline:
“GM Offers US a Majority Stake: Bondholders Rebel at proposal; UAW would wind up with 39% Ownership”
To anyone who listens to Rush, you know he called this. He has been saying it for a long time that the end result of all this auto industry mess would be that the Union would have a seat on the board, or own the companies in part or whole. Well hes right again, will that move his accuracy rating up .0000001%?
This is pretty big folks and I see two distinct possibilities for the futures of these companies should the UAW end up controlling large portions of the companies.
1. They will fail. And it will be an epic FAIL. They will use their utopian ideals to systematically destroy these companies. The end result will be a bailout that will make all previous bailouts look like chump change.
2. This prediction is a long shot like 1 in a billion, the union realizing they stand to benefit greatly from the companies seeing as they will own over half of one, and just under half of the other, that they will begin to look like greedy capitalist. When they stand to benefit from the balance sheets will they start cutting the fat (ie life time health benefits etc)? Maybe. But if they do you can be sure they will accompany any budget cutting with government lobbying for universal healthcare, or more SS benefits. Basically whatever the UAW workers “give up” the companies will push the Federal Govt. to replace those benefits.
The companies will become examples of what happens when the means of production are put into the hands of the “people”. Will output soar as workers are freed from their bougiouse masters? Or will the companies slowly crumble under the weight of their lofty utopian ideals.
What will happen? Who knows….
Like the Jimmy Buffett song “Only Time Will Tell”