We have an auto bailout. The broad outlines:
The plan pumps $13.4 billion by mid-January into the companies from the fund that Congress authorized to rescue the financial industry. But the two companies have until March 31 to produce a plan for long-term profitability, including concessions from unions, creditors, suppliers and dealers.
The bailout plan sets “targets” rather than concrete requirements about what those concessions may be, meaning that Mr. Obama and his advisers have enormous latitude to decide how to define long-term viability.
It includes, of course, a little gift from the anti-labor Bush administration to the UAW:
Already, Ron Gettelfinger, the president of the United Automobile Workers union, said he was “pleased” that the administration acted on the loan requests, but said the President added “unfair conditions” that singled out blue-collar workers.
Mr. Gettelfinger said the union expects to appeal to Mr. Obama to alter the expectations for wage and benefit cuts. According to Treasury Department officials who drafted the wording, Mr. Obama would be free to change the requirements and loosen the standards, especially on how much workers will have to give up.
Empty Wheel offers this:
The President of the United States just dictated that American corporations pay their employees significantly less than the employees of foreign owned manufacturers. And/or, he dictated that American corporations pick the pocket of their senior retirees.
The union wage target, Empty Wheel adds, is part of an effort to break the union and require that “employees of American-owned companies make significantly less than the employees of Japanese-owned companies.”
Bush is demanding is that the UAW lower wages plus pensions to the level of Japanese wages plus pension (though since they have very few retirees, their pension number is basically zero). Alternately, they could lower this number by basically picking the pocket of a bunch of seniors, by taking away pension money those seniors already earned while they were still working. But one or the other will have to happen.
“In other words,” dday at Hullabaloo writes, the plan creates a race to the bottom because
the UAW must take wages and work rules that are the same as non-union plants, and since “wages” include benefits and legacy costs, and the Big 3 have quite a bit more of those than their Japanese counterparts, this would depress wages FAR BELOW non-union plants.
It’s a pretty bald move by an outgoing president who had told Congress that he had supported its earlier bailout plan, which did not include the union clause.
