Danny Douglas and Jay Campbell, have been sentenced to 18 months and 12 months plus one day, respectively, after being convicted of extortion. It seems the two former United Auto Workers bosses agreed to end an 87-day strike at a GM plant in Pontiac, MI back in 1997 – but only after General Motors agreed to hire Campbell’s son and the son of another UAW official for high-paying jobs they were evidently not qualified for.
Mickey Kaus picked up an interesting tidbit from a union newsletter:
Corporatism Watch: Blame the Proofreader! Was a representative of the Obama administration “literally sitting in the room” for recent UAW/GM negotiations—as a newsletter to members of a UAW local said. Or was the union report just a “misprint, as an official of the local now claims? … P.S.: Does it matter? The government owns 32% of GM, after all. Why shouldn’t it watch over its investment? I suppose there are two fears: 1) The Obama administration might order GM’s managers to give the UAW a break the union otherwise wouldn’t get, or 2) The Obama administration might try to facilitate any agreement–including perhaps one that includes concessions the UAW otherwise wouldn’t give–by promising to make it up to everyone involved by steering business or favorable government rulings their way or by simply bailing them all out again. Both sorts of favoritism can be accomplished, however, whether government officials are “in the room” or merely get second-hand reports and make a few phone calls. It’s mainly a question of “optics.” …
But given the impossibility of real transparency–i.e., proving to the public that the administration isn’t playing favorites, directly or by remote control–optics are all the Obama administration’s got. …
Ford Motor Company was the only “Big Three” auto company that did not take government bailout funds. GM and Chrysler became an extension of the federal government in a forced partnership with the United Auto Workers union. As the strongest of the three, Ford is now the target of big labor who has authorized a strike against the company.
As John Lillpop says:
With 14-26 million Americans unemployed and or underemployed, one would expect an ‘attitude of gratitude’ among workers still holding jobs, especially those being paid an average of $58 per hour. However, unionized auto workers in Detroit have grown accustomed to enjoying unreasonable wages and benefits, courtesy of thugs who operate the United Auto Workers union.
Lillpop continues:
When the government stepped in and bailed out GM and Chrysler with an infusion of cash, there were certain concessions made by the UAW. The bailout allowed the companies to survive and even revamp their businesses. It also prevented the union from striking against GM and Chrysler. Through that period, Ford became somewhat of a shining star by not taking any bailout money. Ford’s reward for taking the harder route is that the UAW, in negotiations with all three makers, can strike.
This reason, while perhaps sentimental, is one key negotiating tool that Ford has in Ford’s cap. The perception that the union will punish Ford, the company that did not take a bailout, would leave a stigma on the UAW that could take years to erase. It is the classic mantra that no good deed goes unpunished. This mantra is something that people in America are growing tired of, in particular because of the state of the economy.
The fact is Obama’s pro-forced unionism policies are coming home to roost. While he desperately needs the economy to turn around in order to save his re-election chances, his allies in big labor are now engaging in wildcat strikes in Washington State and are ready to cause even more economic damage in Michigan. If the president would empower workers and not union bosses, he would likely not be facing such daunting challenges.
Meanwhile, United Autoworkers Union Bosses Pocket $3.4 Billion
In late 2008, GOP President George W. Bush “loaned” a total of $19.4 billion in federal taxpayers’ money to the Big Labor-controlled General Motors Corporation (GM).
Mr. Bush assured taxpayers they would get their money back.
But by the spring of 2009, we learned we would never get back any of the money Mr. Bush had handed over to GM shortly before he left office. His successor as President, Democrat Barack Obama, announced GM would never have to settle up with taxpayers.
President Obama simultaneously earmarked an additional $30 billion in taxpayers’ money to by-then bankrupt GM.
In exchange, taxpayers got a 61% stake in the money-losing company.
Echoing Mr. Bush, Mr. Obama and his advisors insisted that, when the government eventually sold off its whole stake in GM, taxpayers would get the entire $30 billion back, and perhaps even reap a profit.
Just last August, the President said it again.
He told a CNBC interviewer: “We expect taxpayers will get back all the money my Administration has invested in GM.”
‘Government Officials Are Willing to Take the Loss’ (more…)
Matt Mayer of the Buckeye Institute debunks the long-term economic growth without Right To Work freedom is sustainable. Mayer uses a Columbus Dispatch reporter Joe Hatlett column that featured Former Michigan Gov. Jennifer Granholm to expose the fact that corporate welfare and reduced regulations ignore the “proverbial elephant in the room weighing down” compulsory union states like Indiana, Ohio, Illinois,, and Michigan.
From Matt Mayer’s post:
“With Michigan bleeding jobs and tax revenues, Granholm said she followed the corporate playbook in her attempt to close a huge state budget deficit and make Michigan more competitive. ‘In listening to the business community, I cut takes [sic] 99 times, and I ended shrinking government more than any state in the nation. In my two terms, I cut more by far than any state in the nation. And yet, we still have the highest unemployment rate.
There was no correlation.’ Granholm conceded that streamlining business regulations and lowering taxes — Kasich’s economic recovery mantra — are helpful, but they aren’t a panacea…[l]abor costs, help with start-up costs and proximity to markets are other factors.”
Hallett and Governor Granholm fail to mention why streamlining regulations and lowering taxes aren’t helping the northern states (located within 50 percent of the U.S. population and with low start-up costs) compete against the southern and western states. Instead, Hallett ignores the obvious answer and pleads for an end to corporate pork (with which we enthusiastically agree).
The reason Michigan and Ohio can’t compete is that the southern and western states already have fewer regulations and lower taxes, so “catching up” with those states still leaves the proverbial elephant in the room weighing down the northern states. Plus, those states are also pushing for lower taxes and fewer regulations, so the northern states are perpetually behind them. The elephant, which Governor Granholm does hint at, is labor costs, or, more specifically, unionized labor costs (see: General Motors and the United Auto Workers).
As I noted in Six Principles for Fixing Ohio, “Of course, tax and regulatory burdens also impact a state’s economy. Although many of the forced unionization states have heavy tax burdens and many of the worker freedom states have light tax burdens, some heavily taxed worker freedom states (Idaho, Nevada, and Utah) had the strongest sustained job growth from 1990 to today.
Similarly, a few moderately taxed forced unionization states still had weak job growth (Indiana, Illinois, and Missouri). The combination of both a heavy tax burden and forced unionization is deadly when it comes to job growth, as 11 of the 15 worst performing states are ranked in the top 20 for high tax burdens.” If Ohio and the other states from Missouri to Maine want to truly compete with Texas, Georgia, and South Carolina, then those states need to enact laws that protect the rights of workers not to join a labor union to get a job. (more…)
Will the last person living in Detroit, please turn out the lights. It may be a bad joke, but it is quickly become sad reality. Detroit is dying thanks to the greed, power and corruption of the labor union bosses and the politicians who did their bidding. An Investors Business Daily editorial asks:
Poor Detroit. It hasn’t had any good news for decades, and now, despite a $77 billion bailout of the auto industry, its population continues to implode. The No. 1 reason: the United Auto Workers union.
Census data released Tuesday show Detroit’s population has plunged 25% since 2000 to just 713,777 souls — the same as 100 years ago, before the auto industry’s heyday. As recently as the 1970s, Detroit had 1.8 million people.
What’s happening is no secret: Detroiters are fleeing an economic disaster, the irreversible decline of the Big Three automakers.
In his now-famous Super Bowl commercial for Chrysler, rapper Eminem drives up to a theater in a sleek new 200 model and says, “This is the Motor City. And this is what we do.” But, sadly, that’s no longer the case. Detroit’s decline has been shocking.
Sure, a lot of the blame goes to a generation of bad management. But the main reason for Detroit’s decline is the greed of the industry’s main union, the UAW, which priced the Big Three out of the market.
As recently as 2008, GM, Ford and Chrysler paid their employees on average more than $73 an hour in total compensation. The 12 foreign transplants, operating in nonunion states mostly in the South and Midwest, averaged about $42 an hour.
Guess which manufacturers are healthiest and expanding their market today? In 2008, the Big Three still made 59% of all cars in the U.S. But, according to recent estimates, their market share is now 46% — with foreign companies selling the bulk of all U.S. cars. So Detroit’s loss has been the South’s and Midwest’s gain.
Behind this is the gold-plated benefits package once guaranteed to UAW workers. We’re not against workers getting what they deserve, but total pay and benefits for a full-time worker for the Big Three until recently averaged about $140,000 a year. (more…)
White House Again Exhorts Taxpayers to Feel Good About Boondoggle
Autoworkers union President Bob King and other union bosses are the chief beneficiaries of the GM/Chrysler bailouts. Credit: www.motortrend.com
In the summer of 2009, the Obama Administration handed over $49.5 billion in federal taxpayers’ money to the Big Labor-controlled, money-hemorrhaging General Motors Corporation (GM). At the time, bankrupt GM was on the verge of being forced into liquidation. Its assets would then have been sold off.
The White House publicly pitched this costly taxpayer-funded bailout as a bid to save American jobs. However, President Obama and his Administration actually knew full well that the number of Americans employed by GM would continue to shrink rapidly, even after the massive taxpayer bailout.
Taypayer Bailout Hasn’t Stopped Disappearance of Union Boss-Controlled Manufacturing Jobs
In early 2009, GM had 47 production facilities in the U.S. By the end of this year, it will have just 34. The company’s vehicle sales today, when the country’s economy is recovering, albeit weakly, remain far below what they were in 2008, when the economy was in a recession.
More than 80% of U.S. automotive manufacturing jobs are now in union-free firms, and these firms, not bailed-out GM and Chrysler, surely represent the future of domestic automotive manufacturing employment.
Rather than workers, the single greatest beneficiary of the GM bailout was the United Autoworkers (UAW) union hierarchy. Along with sympathetic Obama agents, union officials were effectively left in charge of the company. (more…)
Mark Mix, the President of the National Right to Work Committee, writing in the pages of the Investor’s Business Daily, looks at the crony capitalism at General Motors and their corrupt relatioship with the government. It’s a good deal for Big Labor, but it’s bad news for the taxpayers.
Given that the wasteful work rules that UAW bosses — wielding government-granted monopoly-bargaining power over employees — insisted on for decades were largely what drove GM into bankruptcy, they certainly didn’t deserve kid-gloves treatment. Yet that’s what they got.
A UAW-controlled auto retiree health care fund was owed $20 billion by GM before the bailout.
Under the White House-dictated terms, UAW-appointed fund managers got back half of what they were owed in cash, whereas taxpayers who were owed $19.4 billion didn’t get a dime back in cash.
Instead, the Obama administration “forgave” this entire loan on taxpayers’ behalf and earmarked an additional $23.5 billion for the company’s trip through bankruptcy. In exchange for the nearly $43 billion funneled to GM, taxpayers acquired a “60.8% equity stake” in GM.