What can Spot say about the auto industry bailout that hasn't been said?
Not much Spotty; keep it short.
Such impertinence, grasshopper! Spot has no idea where you get it.
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We've been examining the financial and auto sector bailouts through the techno lens differentiating finance and industrial capitalism. Seven hundred billion for the financial services industry and mortgage problem, and nothing - so far - for what is almost certainly the biggest industrial sector we have left in the United States. The antipathy leveled at the industry, and the UAW auto workers in particular, is breathtaking, especially from some senators from southern states:
DETROIT - Festering animosity between the United Auto Workers and Southern senators who torpedoed the auto industry bailout bill erupted into full-fledged name calling Friday as union officials accused the lawmakers of trying to break the union on behalf of foreign automakers.
The vitriol had been near the surface for weeks as senators from states that house the transplant automakers' factories criticized the Detroit Three for management miscues and bloated UAW labour costs that lawmakers said make them uncompetitive.
But the UAW stopped biting its tongue after Republicans sank a House-passed bill Thursday night that would have loaned US$14 billion to cash-poor General Motors Corp. and Chrysler LLC to keep them out of bankruptcy protection. The Bush administration later stepped in and said it was ready to make money available to the automakers, likely from the $700-billion Wall Street bailout program.
Apparently, this group of senators tried to negotiate directly with the UAW:
Still, autoworkers remain angry with the senators who tried to negotiate wage and benefit concessions from the union, then scuttled the House-passed bill that would have granted the loans and set up a "car czar" to oversee the nearly insolvent companies and get concessions from the union and creditors. Their top targets were Senate Minority Leader Mitch McConnell (R-Ky.); Senator Bob Corker (R-Tenn.), who led negotiations on a compromise; and Senator Richard Shelby (R-Ala.), who has been a vocal critic of the loans.
But as the New York Times points out, the labor differential between the domestic and foreign automakers isn't even all that great if you take out, especially, the so-called "legacy costs." Here's a graphic from the article:
Certainly, regional factors like cost of living account for part of the differential, too.
There are, of course, many more retired Big Three auto workers than foreign-owned factory auto workers. As Spot has observed earlier, with better accrual and funding of these benefits by management at the time the costs were actually incurred, they wouldn't be such a drain on the companies currently. But, by deferring the expenses for as long as possible, management has been able to inflate its profits, take bigger salaries, and earn bigger bonuses for decades. According to the linked article, the UAW is going to begin picking up the tab for the companies.
Now, it's time to pay the piper, and somehow it's the auto workers fault. Shredding the industry just because you don't like unions is an act of titanic stupidity. And turning these men and women - who are among the most skilled industrial workers in America - into fry cooks isn't going to improve the lot of the rest of us, either.
A thump of the tail to John Cole.
Finally, a question: who is Spot quoting in the title to the post?