It's an even grimmer than usual day for Detroit. Last night's Senate negotiations collapsed, sending the auto industry bailout to the scrap heap: the Big Three rescue proposal needed 60 votes, and the final tally was 52-35. Buckle up and assume the crash position…
The dramatic late-night developments could doom General Motors to a bankruptcy and closure in the coming weeks, with Chrysler LLC potentially following close behind.
In light of this dismal information, I just want to know one thing: whom do we blame? Oh, the auto workers' union? Of course…
Senate Minority Leader Mitch McConnell, R-Ky., said the sticking point was the United Auto Workers union's refusal to put employees at U.S. auto manufacturers at "parity pay" with U.S. employees at nonunion plants operated by foreign automakers in the United States.
Negotiations centered around proposals from Sen. Bob Corker, R-Tenn., that would have set dates in 2009 by which the automakers receiving the loans had to reach cost cutting agreements with unions and creditors or be forced into bankruptcy…. [U]nion workers at U.S. automakers make about $3 to $4 per hour more than the non-union U.S. employees of foreign automakers like Toyota and Honda, according to the Center for Automotive Research.
The benefit costs are significantly greater for U.S. automakers, though, because they have to pay health care costs for hundreds of thousands of retirees. The union agreed to close much of that gap in the 2007 labor agreements by shifting responsibility for retiree health care to union-controlled trust funds. But those changes won't take effect until 2010.
You know what, I'm just going to put this out there. I don't think we should blame the UAW, or the auto executives, or members of Congress.
This whole mess rests squarely on the frail, greedy shoulders of those health care-having retirees. Let's make them crawl over to Hank Paulson and ask for a piece of the $700 billion TARP pie, to save their precious walkers and prescriptions and whatnot.
And then let's take away their walkers. It'll serve them right.
Tags: Auto Industry, House of Representatives, Mitch McConnell, TARP