Auto-Bailout …

 

Auto-Bailout Casualties

 
In the Obama auto bailouts, jobs were not all created equal. The administration moved heaven and earth to save the jobs and generous benefits of General Motors and Chrysler workers who belonged to the United Auto Workers, ripping up the contracts of bondholders and secured creditors to give the UAW an enlarged stake in the new companies. “As a result,” notes Amy Payne of the Heritage Foundation, “even after the reorganization, GM still has higher labor costs ($56 an hour) than any of its foreign-based competitors.”

But non-UAW workers affected by the bankruptcies were not so lucky. At a former GM subsidiary, Delphi, which manufactures automotive parts, 28,000 UAW workers were paid full pension benefits that GM had promised, but 41,000 other workers were not. As Todd Zywicki, professor of law at George Mason University, testified before the House Oversight and Government Reform Committee: “Had new GM treated Delphi’s UAW and non-union employees equally, the Treasury could have paid $1 billion less for the GM bailout. Instead, some workers became more equal than others.”
And perhaps no workers were less equal in the bailouts than the employees of GM and Chrysler dealerships. About 100,000 mostly blue-collar jobs — a number approaching the total work force of GM and Chrysler, according to the Cleveland Plain Dealer — were put on the chopping block by “Team Auto,” the Obama administration’s auto-bailout task force, which insisted on extraordinarily rapid closures of auto dealerships during the government-organized bankruptcy proceedings.

Read more: http://www.nationalreview.com/articles/313125/auto-bailout-casualties-john-berlau

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