It’s Not an Auto Bailout, It’s a Union Payoff
November 17, 2008When America battled for economic supremacy against Taiwan, Japan, Germany and others, many of us adopted a patriotic battle cry. "Buy American!" we exclaimed, and many of us did.
In 2008 we are still buying American, but that phrase has taken on a whole new meaning. We don’t just buy TVs, or soap or cars from U.S. companies. We now buy the companies themselves, and the many of our so-called “leaders” in Washington want us to buy even more.
Bailout fever has become a full-fledged epidemic inside Washington, and the list of bailouts is still growing. Now the Big Three automakers – Ford, GM and Chrysler – and their congressional allies are lobbying for $25 billion or $50 billion or more from the government.
Only it has little to do with saving Detroit and a lot to do with helping out the Democratic Party’s political machine. The chief recipient of this deal isn’t the companies, it’s the union. A bailout of Detroit would secure that the Big Three continue to fail and pay exorbitant sums to thousands of union workers.
The Los Angeles Times says unions funded the Democratic victory to the tune of more than $80 million just this election. The San Francisco Chronicle puts the number a bit higher – $450 million. Either way, they want their payback. They already have two things in mind – eliminating secret ballots in union elections and saving their 139,000 brothers and sisters in the United Auto Workers.
The New York Times quoted Gary N. Chaison, professor of labor relations at Clark University, saying without a bailout the union will “be a shadow of what it was 50 years ago.” “The future of the U.A.W. will be determined over the next two weeks,” he explained in a Nov. 17 story.
Labor knows it doesn’t have to budge. The Nov. 17 Financial Times made that clear. “The US United Auto Workers (UAW) union has ruled out concessions – at least for the time being – to help rescue the ailing Detroit-based car industry.”
That refusal should be front and center in the news, but it’s not. This week, we can expect more pro-bailout coverage from a news media that thinks government should run all private industries except the media. Watch the spin as auto executives and their temporary union allies are coming to Washington to beg for more of our cash.
It’s certainly not new. Watching the news, you’d wonder why anyone opposes it. CNBC’s money madman Jim Cramer keeps warning viewers that the loss of GM will cause a market “meltdown.” “Well you know we would have closed GM and have 10 percent unemployment – then really have some fun,” Cramer said in his Nov. 11 “Stop Trading” segment on CNBC’s “Street Signs.”
The reason for Cramer’s rant: He says he wants to prevent Great Depression II. Not a downturn, mind you, but another Great Depression.
Other stories have basically taken the attitude of everything else got bailed out, why not the auto industry? ABC’s “World News with Charles Gibson” on Nov. 11 even listed other troubled industries to pose the same question. “If we’re bailing out autos, why not U.S. steel companies, airlines or newspapers?” asked ABC correspondent Chris Bury.
And one Detroit Free Press columnist complained that the industry is being forced to fail and that he “never knew Detroit was a dirty word.”
In a front-page list of eight recommendations to the president-elect, even the financial weekly Barron’s seemed to reflect the media mindset. It urged the president to “invest $25 billion each in GM and Ford.” But the kicker was the publication said Obama should “demand concessions from labor, management and shareholders.”
Labor give concessions with their candidate taking over in Washington? Never!
At least Republicans are raising the points the media is missing. "Just giving them $25 billion doesn't change anything," Sen. Jon Kyl of Arizona, the Senate's second-ranking Republican, said on Fox News Sunday. "It just puts off for six months or so the day of reckoning."
Kyl is right. There is no guarantee even $50 billion will do anything. It’s an unfortunate reality, but companies fail. Sometimes you can blame bad management, other times intractable labor. In this case, you can blame both as well as products that are inferior to their competition at Honda and Toyota.
Still we’ll be urged by the Democratic leadership and the media to “buy American.” What they really want us to buy is a bill of goods. Ordinary car shoppers make that decision every day, and when they buy a car, they no longer buy what Detroit’s selling. Now they’re supposed to buy the same line from Hill Democrats?
I don’t buy it.