Diary

Auto Bailout Becoming a Sop to Unions?

With the precedent set of a bailout from Washington, the automakers are crawling and sticking their hands out for a new bailout for them. But, will a bailout for the Auto Industry actually go to the Industry or will it be a sop to unions?

Unfortunately, it looks like an auto industry bailout will feature some of those millions going to unions to fund weakly funded and over indulgent union benefit plans. This should not stand as it is no bailout for industry but a propping up of unions that have negotiated benefits that destroy the ability for our nation’s carmakers to be competitive in the world market. These over indulgent benefits are one of the biggest reasons our automakers are failing in the first place. A government prop for these destructive benefits is good money going after bad.

The National Legal and Policy Center (NLPC) has issued a warning concerning these plans saying that these bailouts should not be a “prize for special interest groups” like the unions.

UAW wants to instead enrich health and retirement plans they control, like the $35 billion GM VEBA (Voluntary Employee Beneficial Association). GM is scheduled to make a $7 billion payment in 2010. These entities will survive the collapse of the companies. Union boss control of all this money will not protect worker benefits, but will only guarantee another generation of union corruption and political power.

The NLPC also goes on to say that union contracts are the “automaker’s biggest problem.”

On Special Report on Fox News, Charles Krauthammer agreed with the NLPC’s assessment. Saying that any bailout for the automakers will be “inefficient,” he went on to say that union contracts are a main problem.

As Mort indicated, it’s a way of saving the old obsolete and ruinous union contracts which have driven the big three into bankruptcy at a time when the manufacturing of Japanese companies and others in the south is succeeding.

So, in the end, you have to make a decision. Are you going to throw money into the auto companies? It will be a maw that will be endless. And you have to draw a line.

That is right on. If we bailout the automakers and any of that bailout goes to unions it an illicit action. That will not help anything at all.

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