Flying Pink Unicorns

Seriously stubborn democrats

Several news reports have stated that Bush offered some movement on the stimulus package that the democrats wanted in exchange for help in passing a free trade agreement with Colombia. Even more interestingly, there was talk of Bush asking the UAW for help on the same free trade agreement in exchange for more federal assistance to the automakers.

The democrats in congress have been noncommittal.

Incredibly, the UAW publicly rejected any such help on a free trade agreement in exchange for aid to the automakers.

http://money.cnn.com/news/newsfeeds/articles/djf500/200811111153DOWJONESDJONLINE000413_FORTUNE5.htm

The UAW spokesman said, "Colombia had the worst record in terms of murdering trade unionists and the violence has been continuing. . . . . We don't think we should be doing free-trade deals with countries that are murdering people because they're engaged in union activity."

I find it extremely hard to believe that principle is motivating the UAW. I'd like to see a poll of UAW members on this one. Gee, let's see. Government help to my employer in exchange for an insignificant free trade agreement. Not rocket science to a line worker in Michigan, is it?

The UAW has a goodly share of the blame for the looming bankruptcy facing GM, and probably Ford. They blithely negotiated salary and benefits far in excess of market rates. Now a union's job is to get the best deal for its members that it can, so my anger is not unlimited, but despite huge job losses since 1980, the UAW still seems to think that GM is the golden goose that will keep laying golden eggs. It has been more accommodating in recent years, but not nearly as accommodating as conditions would appear to require.

Of course, GM management has an unbroken record of terrible decision making and general overall idiocy since the mid 1970s. Whether it was tens of billions wasted on robots, agreeing to the insane union deals, fighting fuel standards rather than getting ahead of the problem (as the auto industry did with mandatory seat belts/air bags), keeping stodgy brands like Oldsmobile around far too long, underfunding its successful Saturn decision, and so on and so on and so on, GM management has thoroughly screwed up the company for decades. However, continuing to agree to very generous retiree benefits, and continuing to pay dividends in recent years, achieved a level of stupidity I didn't think even GM's management could manage.

GM's back is to the wall. It publicly announced it would go bankrupt next year without massive federal government assistance. I predict that such assistance will be forthcoming. I oppose such assistance, because this is not a liquidity crisis, wherein a big profitable company temporarily can't borrow any money and thus runs out of cash. Rather, this is a terribly troubled company with a thoroughly uncompetitive cost structure. In exchange for any aid, I would demand that the union contracts be torn up and renegotiated at a massively lesser cost. If the union strikes (a real possibility) I'd just shut down the company, and they'd get zip.

I find it highly unlikely that a newly sworn in President Obama would be anywhere remotely near this tough on a union. If he is, I'll be astounded, and my estimation of him will soar.