U.A.W. Deal: “The Cadillac of Bankruptcies”
Posted by danishova on May 2, 2009
And thus we learn that “these are truly unusual times”. The updates are flying fast and furious to this outrageous abuse of power by the Obama administration and their unprecedented handover of power to the U.A.W. , so I’ll start a new thread with this from The New York Times:
“Union Takes Rare Front Seat in Deal for Chrysler”:
Labor unions usually dread bankruptcy, and for good reason. Their pay, benefits and pensions typically suffer significant cuts, as airline and steel workers can attest.
But for the United Automobile Workers union, Chrysler’s Chapter 11 case, which began in New York on Friday, could turn out to be — if the company survives and thrives — the Cadillac of bankruptcies.
The U.A.W., for example, has received upfront protection from the Treasury Department for its pension plan and the fund that will take over responsibility for retiree medical benefits.
Moreover, that fund, called the voluntary employee beneficiary association, or VEBA, will control 55 percent of the equity in the new Chrysler once it emerges from bankruptcy, and hold a seat on the Chrysler board.
But for now, even though Chrysler workers had to agree to lower pay and less generous benefits as part of the deal, the U.A.W. appears to be enjoying relative safety in helping steer the course of the Chrysler bankruptcy.
“I’m very comfortable,” Ron Gettelfinger, the U.A.W.’s president, said Friday on National Public Radio. “It’s not like we’re going into this bankruptcy fighting with Chrysler and Fiat and the U.S. Treasury. We’re going in there in lockstep to put our agreements in place.”
Lockstep is a good word. Especially when you have Obama strong-arming and smearing the legally-entitled senior creditors, and the union workers have a cushy deal. (See NPR report at bottom of page for further details!)
Asked if he could recall any other union that fared as well, David L. Gregory, a labor law professor at St. John’s University, replied: “Nobody’s even close.”
But the U.A.W. is also no ordinary union. Even though its membership at the Detroit automakers has shrunk to a quarter of its size in 1990, it still maintains tremendous influence in Washington, partly because of its heavy political contributions.
Read the whole thing!
Meanwhile, for more on what the poor babies at U.A.W. had to give up, there’s this recent report from NPR:
The thing that stands out to me is that we did not see a cut in pay or benefits. That is huge and considering what is going on around with job losses (and pending job losses). I consider myself very lucky. Our only losses are a couple holidays, forced vacation time used during layoffs, Christmas bonuses, performance bonuses like "profit sharing."
Another minor loss is overtime pay is now after we work 40 hours. It was set up where we were paid time-and-a-half for any time we work over 8 hours in a day and on Saturdays. The way it is set up now is if you miss a Tuesday and you work Saturday, Saturday will be at your normal hourly rate until you complete 40 hours….
1. The entire U.A.W. deal can be found here.
2. Ed Morrissey is fast and furious with updates about the White House tactics against Senior bondholders.
3. Red State calls it a Thugocracy, and will get no argument from me.
4. Gateway pundit has video of Mark Levin in action.
5. JammieWearingFool talks about the Times article and the alleged W.H. thuggery here.
6. I was reading Newsbusters and was reminded about the Fairness Doctrine lurking in the background, with a ‘Diversity Committee’ Meeting’ to be held on May 7th by the FCC. This would make it way easier for the White House to act as extortionists, now wouldn’t it.
7. FT weighs in here, references Machiavelli, and warns us of the consequences to the financial market at large. An excerpt:
More importantly, the Chrysler saga sets a dangerous precedent for US capital markets. For once, the law is unambiguous: senior secured creditors should be paid before junior unsecured creditors and employees (the words “senior” and “junior” are a bit of a give-away on this point). By turning legal wisdom on its head – and vilifying investors that opposed the move – the administration is signalling the principle is no longer sacred.
8. Flopping Aces provides in-depth analysis of Obama’s abject disregard for contracts, and the Constitutionally mandated separation of powers, here.