[quote]Mhatch wrote:
Ahh, they had to cut corners just to maintain profitability. Why? We, as a nation, enacted labor laws that allow unions to hold their companies hostage. That is the only real reason I believe they should be bailed out or guided through bankruptcy. Get GM in court, shred UAW’s labor contracts, and then get them out. If they fail again after that then let another company buy GM.
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This is so often neglected.
It has to be a fact that for many jobs at GM, were there a free market there would have been folk lined up to take various unskilled and low-skilled positions at $10 an hour, $20 an hour etc according to the skill level required.
But GM could not hire them at such a mutually-agreeable pay. There were people who would have wanted to take it – been very glad to have it – and a company that would have been very happy to pay that, but oh no.
GM management certainly made mistakes, but the reality is that the UAW had obtained, thanks to the laws, the automaker’s testicles decades ago and has had them in the lockbox ever since. UAW required, at threat of immediately destroying the companies if they did not comply, contracts that could be fulfilled long-term only with maintained high market share and an ever-expanding market. Said UAW contracts made it impossible to offer pricing allowing maintenance of such high market share. As market share dwindled, yet benefits (including for vast numbers of employees no longer working) remained locked in according to assumptions of what would be possible to pay that no longer held, the problem became exponentially worse.
Exactly how downsizing GM is going to aid in paying for the legacy costs, I have no idea. I am pretty sure no one does. Personally I don’t think there’s even an intent: instead the intent is to create a crisis demanding that the Government assume health care costs, nationally.
In other words that the taxpayer assume all these legacy costs. Perhaps not just health but underfunded pensions (as with the automakers), too.
And that’s another point: UAW agreed to these underfunded pensions plans.
Suppose I work for you and you offer me say $40K per year annual retirement. But I refuse and say I will not take this, though that’s all you can pay. But we work it out – you won’t put in enough money each year to fully fund the $80K/year pension I demand, but you trust that the business will grow enough that after all those years roll by, the money will be there to pay it. I agree to this underfunded pension plan. You agree to it in good faith.
But when all those years roll by, it turns out that you no longer have 48% market share. In fact you’re down to operating one push cart on the sidewalk.
Am I going to get $80K per year retirement from you? Nope, it doesn’t exist. Either I agree to less, despite the contract, or all you can do is go bankrupt and most likely not pay me a thin dime, if there are any secured creditors.
Oh wait a sec, I vote Democrat and give BIG money to Democrat politicians so screw the secured creditors! I come first!
Still ain’t happening though, it’s just a delay.
Unless of course the taxpayer gets nailed for my high-falutin’ pension for unskilled or low-skilled (in many cases, not all) labor. Which I obtained by virtue of being given the power to threaten the company with immediate destruction and to deny the company the right to hire others for mutually-agreeable pay. Hey, I’m union! They had no right to hire others for mutually agreeable pay and benefits!
