Timothy Carney, Washington Examiner:
Imagine if President George W. Bush used strong-arm tactics to bend the law to favor a politically connected company with $1.2 billion in assets, including a private golf course. What if that company’s political action committee had spent $13 million in the previous election, including more than $4 million to elect him?
Barack Obama has done just that. The company is called the United Automobile, Aerospace & Agricultural Implement Workers of America International Union – or the UAW for short.
Obama and the Democrats will employ euphemisms when discussing the President’s plan to circumvent bankruptcy law and hand majority ownership of Chrysler over to the UAW. They will speak about “the workers†taking ownership of the company, with some arguing that the workers, by right, are the senior creditors in Chrysler’s bankruptcy.
This paints the union-versus-creditors battle for control of Chrysler as a fight between blue-collar workingmen and greedy hedge fund speculators in suits.
But that abstraction—equating the UAW with “the workersâ€â€”is grossly misleading. John Doe on the assembly line will not be running Chrysler or directing the use of billions in bailout dollar. No, the union management will become Chrysler’s management.
So this is a gift to the union management, which, when you look at it closely, is a big, politically connected company whose executives pamper themselves and practice patronage on the backs of the workers.
Compare the UAW’s political activity to that of the most notorious companies that were cozy with the Bush administration. The autoworker union’s political action committee spent $13.1 million on the 2008 election.
If you take the PACs of Exxon, Halliburton, Peabody Coal, and Lockheed Martin, combine their 2008-cycle political spending, and multiply it by four, you get just over $13.1 million. The UAW’s expenditures on the 2008 presidential contest alone exceed the total House, Senate, and White House expenditures of those four companies.
Peer deeper into the UAW’s finances, and it starts to look even more like a big business. The organization sits on nearly $1.2 billion in investments. This is money the UAW took from the paychecks of workers, money that now functions as an endowment out of which the union pays its staff and subsidizes its golf resort.
Black Lake Golf Club, which the UAW brags is “one of the finest anywhere in the nation,” is owned by the union. Situated at the very top of Michigan, a drive of more than four hours from Detroit, it’s not exactly accessible to the union rank and file.
The resort is subsidized by workers’ paychecks, too—the union currently has $29.6 million in loans outstanding to the resort. That’s not their only posh real estate. The UAW’s Washington headquarters, home base for the union’s $1.6 million-a-year lobbying operation, is a beautiful $2.98 million townhouse in the DuPont circle neighborhood.
While UAW membership has fallen by 32.5 percent since 2002, the national headquarters has kept its spending nearly the same—a reduction of only 1.9 percent. Add these facts together, and it starts to look like the union management exists largely to preserve union management.
These are the people who would, practically speaking, own Chrysler under Obama’s plan. These are the benefactors of Obama’s upturning bankruptcy law and threatening investors.
But Obama’s team will maintain that it’s “the workers†who are taking ownership of Chrysler under their plan. When Obama and Democrats extend future bailouts and subsidies to Chrysler, they will have even more reason to claim that they are simply helping the workingmen. In truth, subsidies and special favors for the UAW are corporate welfare, and considering the UAW’s political activities, the right word might be crony capitalism.
Meh. Stop dithering already. The right word is fascism — with the UAW having bought membership into the good graces of the ruling class.
Somewhere, Jimmy Hoffa smiles through a concrete mask of his face.
What they won’t be doing is making those pesky Chryslers.
I still don’t get how socializing the car companies and giving them to greasy UAW thugs does anything but alienate Chrysler and GM’s most (formerly) loyal customers. Socialists have for years and years been less likely than conservatives to buy American cars and increasingly so even today – socialist aversion to American vehicles hasn’t plateaued by any means. People what love America won’t buy a dirty socialist car or truck what a fatass greasy UAW thug has pawed all over. You just can’t sell that.
What’s going to happen to Jeep?
Anybody know? I have a ’94 Wrangler Sahara. I love it (my wife, not so much — but only because in the winter the corner of the replacement soft top comes up a bit and makes her cold).
Knock wood, it’s been in the shop once, for one day. I can’t even remember why now, but it was an easy and inexpensive fix.
Maybe Kia might could buy Jeep? Or some plucky Canadians?
All the plucky Canadians are playing hockey.
Even this is giving them too much praise.
They are a government mandated monopoly. One which has ownership rights to people, and can tax the people it owns for the privilege of being owned by them. As I said, fascists are very efficient, at getting every last drop of blood, out of every stone, before the crush it under heel.
they not the
Monopoly power has always been fun for the monopolists, not so much for everyone else. Which is why the IMF and World Bank enjoy their golf course too.
When they take ownership, will they become the evil fatcat big business demons they replaced?
That was a rhetorical question, the answer being NO!
“What’s going to happen to Jeep?”
At this point, who the fuck knows? I love my Jeep, but they’ve managed to screw up the future of a good brand. Screw Chrysler and screw the UAW.
RIP Ford,
Whoa! There’s a nic I haven’t seen in a while. How ya been?
Can you say Conflict Of Interest?
With an ownership stake in Chrysler, what incentive would they have left for constructive negotiations with Ford? Or even GM? Didn’t anyone in the WH think of that? Or did they, and what is likely to happen is exactly what they want…
It’s important to remember that when a union is trying to organize a shop, there is only one thing they can guarantee with absolute certainty.
Every worker will pay dues to the union.
Everything after that is a long tango of benefits and pay against rising dues, costs and shaky corporate competitiveness. Unions, for the most part, exist to perpetuate their own authority and influence. Nothing reflects this better than the fact that the UAW will use Obama’s largess to pay themselves and abrogate any responsibility for the future care and feeding of Chrysler.
The reasons for this should be obvious: The UAW knows that Chrysler is a dog with fleas and their concern relates to providing a sop to their workers and a bulge to the organization’s wallet now. When the enterprise falls on its face sometime in the near future, the union will still have its money and influence while shaking their heads and saying, “Hey, what could we do?”
I saw this happen first hand with the ILGWU. Unions exist first and foremost to perpetuate their organizations while doing just enough for workers to provide a smokescreen for their power brokering activities. It’s almost like a suicide pact, along the lines of dosing oneself with minute amount of arsenic mixed in with the greatest chocolate in the world for 40 years until expiration.
Despicable.
GM is next up to the guillotine and, although they stepped away from the devil’s bargain, the Chicago Boyz have Ford in their sights as well.
Doing good Spiny. Well, as good as one can expect in this wondrous age of Obama we’re living through.
Same here, RIP… keeping my fingers crossed.
The non-TARP Chrysler creditors are giving up their opposition to the government’s restructuring plan, it looks like. Too high a cost of one sort or another. So mark this one down as a win for, what?, demagoguery, or is it just a (belatedly) smart business decision?
Only a guess, but somehow Jeep will survive, at least as a brand. Hard to say once they’re out of bankruptcy court how much responsibility they’d assume for existing vehicles, i.e. ensuring parts availability, running a dealer network, that type of thing. But even if Fiat doesn’t want it or doesn’t succeed, somebody will at least buy the name Jeep and produce things called Jeeps. Tata, maybe?
y’know/ if i drive on the other side of the street/
i’m confused! contental[sp] stylee
if i put my foot on the gas
instead of the brake
i’m incontinence style
but if i stay at home with pro wis
i’m content style
Jeff? It’s not fascism when they do it.
Get in line already.
I linked this the other day about what GM is going to do.
It amounts to a bankruptcy with out filing for one. They plan to issue 60 billion new shares which add to the 610 million already out and will reduce their share price to about 2 cents. The new shares will be used to pay of some/most of their debt. Then they do a reverse stock split of one new share for every 100 old shares. Bringing their price back to where it is and leaving the current shareholders with 1% of their former stake.
Treasury bond rates up .75% since Obama decided to void the bonds of Chrysler bondholders
Some enteerprising venture capitalists need to rescue Jeep as happened to HD.
Bears repeating.
i have a wicked huge facial hair[here/here]
beard…
i am begging[?]
trying to reach out[???]
wanna connect w/ U
YOU!
Treasury bond rates up .75% since Obama decided to void the bonds of Chrysler bondholders
Actions do have consequences, don’t they?
I’m surprised that anybody would buy bonds from this pack of thieves at any rate, frankly.
I buy fuck all of this analysis (financial reporters would probably move from their $40k jobs for $120k analyst jobs if they could), but someone fed this guy the obvious:
I sure hope a ton of mortgages didn’t get made a couple years ago with the initial rates getting readjusting at some point.
They did?
Fine, I was thinking about becoming a pirate anyways.
Sorry, link.
Well, anyone who did that who isn’t moving into a fixed rate RIGHT NOW is a fucking moron.
I don’t know the technical terminology for that, as I’m sure Thor, CFJ (Certified Financial Jeenius) would be quick to point out. But “fucking moron” works for me.
Yes, fucking moron is an apt term. Unfortunately, it doesn’t really take all that many fucking morons to wreck our shit.
The wacky thing? Not a perfect storm yet.
Wait until inflation brings up the commodities that the airlines need and no one wants to buy their newly required union/government debt. At that point, the yield required to entice anyone will be impossible to carry.
Coming this summer to a formerly first world country near you.
commodities=commodity. In my whimsical moments, I call it the thing “planes need to fly, that is increasing in price far faster than demand”.
Optimism? Uh. maya. Nobody is buying our bonds. Maybe you should go to some site where they’ll believe the bullshit you sling. You’ve misrepresented yourself here a little too often.
Hey Timothy Carney while you’re imagining about GW imagine this:
Imagine if President George W. Bush did not take 2 out of every 5 days of his presidency either going to – coming from – or on vacation ! Just imagine how “f” up the country would be then…
sorry couldn’t resist..