Sunday, February 15, 2009

Has the UAW Lost Its Mind? Maybe.

This was reported, and I ignored it at the time.

"The UAW stopped negotiations with GM last night, a person familiar with the talks said. A delay in the talks could risk the automakers missing a Feb. 17 deadline to show progress in a government-ordered plan to cut labor and debt costs. It’s not clear what that would mean."

Ticker didn't ignore it, and ruminates a bit.

--If the company and thus its pension fund "booms", the PBGC will be forced to step in and take it over. The PBGC has maximum benefits that it pays out to retirees. If you were getting more than that previously, too bad. Have a banana.

--The guarantees are much more limited than your Pension was, especially if you're not already retired. The cap is based on the law, not your contributions to date, and is invoked at the time the plan goes "boom". If you're under 45 you will get exactly nothing, with the MAXIMUM amount set by law, disregarding (for the most part) your contributions to the system

Ticker thinks that GM will not get an extension of its Gummint loan, NOR an enhancement. He thinks they're going Chapter XI, which is what will trigger PBGC participation. Yes, the Gummint will assume D-I-P (Debtor-in-Possession) financing during the bankruptcy.

But that, my friends, is where Ticker's train comes to a fork in the tracks.

If Obama & Co. assume the DIP role, there's no reason whatsoever that the Gummint will not move to become the owners/operators of GM. That doesn't mean that excess HUD or Education bureaucrats will suddenly become Plant Managers (a prospect laden with humorous implications, indeed...)--but rather that some Socialist Eminentoes will become the Board of Directors and appoint a few of their pals to key positions at the Company.


I am well-aware that President Obama is a strong friend of organized labor, and so are some Americans. But very few are friends of the UAW outside of its membership, and that's a problem - never mind the hubris of the last round of negotiations that got far too much press to remain buried.

He should also be well aware that the UAW has other weapons at its disposal, Cat, Deere, and Case among them, and that Pelosi/Reid/Obama have unlimited hubris.

Wouldn't you enjoy watching the first several months' effort of some dweeb-paper-pusher from HHS acting as a plant manager at (say) Chevy/Detroit? It would partially make up for the $Zillion-dollar loss to the taxpayers, I suppose.

In the very, very short run.

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