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No Bail Out

Here's a fellow Flintite (Flintian) explaining why her former employer shouldn't be bailed out:

The strength of the union and the weakness of management made it impossible to conduct business properly at any level. For instance, I had an employee who punched in his time card and then disappeared. The rules were such that I had to spend hours documenting that this man was not in his three foot by three foot work area. I needed witnesses, timed reports, calls over the intercom and a plant wide search all documented in detail. After this absurdity I decided to go my own route; I called the corner bar and paged him and he came to the phone. I gave him a 30 day unpaid disciplinary lay off because he was a "repeat offender". When he returned he thanked me for the PAID vacation. I scoffed, until he explained: (1) He had tried to get the lay off because it was fishing season; (2) The UAW negotiated with GM Labor Relations Department to give him the time WITH PAY.

I supervised a loading dock and 21 UAW workers who worked approximately five hours per day for eight hours pay. They could easily load one third more rail cars and still maintain their union negotiated break times, but when I tried to make them increase production ever so slightly they sabotaged my ability to make even the current production levels by hiding stock, calling in sick, feigning equipment problems, and even once, as a show of force, used a fork lift truck and pallets and racks to create a car part prison where they trapped me while I was conducting inventory. The reaction of upper management to my request to boost production was that I should "not be naïve".

Another employee in the plant urinated on the feet of his supervisor as a protest to discipline. He was, of course, fired...that is until the union negotiated and got his job back.

Eventually I was promoted to a management position where I supervised salaried employees at HQ. As I left the plant I gave management a blunt message. I told them that I expected the union to act like the union, but I was disappointed that management didn't act like management.

I saw a lot of this in the 1970s when I worked summer jobs in the shop, and my relatives who are still there tell me it goes on to this day. Of course, it's hard to put all the blame on management, when the Wagner Act made it impossible for them to do much about it, because it allowed the UAW to credibly threaten their company with bankruptcy if they didn't knuckle under. This crisis was caused by government, and bailing out the UAW will not solve it.

Also, Jim Manzi explains why we (the taxpayers) can't just buy the three auto companies for their current market value (only seven billion) and save ourselves the many more billions that a bailout would cost. It's kind of amazing that the stock has any value at all (GM's in fact doesn't). Equity in these companies currently has negative value because running them requires putting more cash into them, with no certainty, or even likelihood of return, at least with their current union contracts and cost structure. They are the proverbial white elephants.

This, by the way, is the reason that the notion of selling the Shuttle or the ISS to anyone else is a non-starter. No one could afford them, even if you gave them away.


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The destruction of the UAW would be one of the most significant advances for economic liberty in a long time. (And it *has* been a long time since we've seen such advances.)

Josh Reiter wrote:

These companies need to go down. Let the host die and the UAW parasites will quickly follow. Just keep other innocent companies away in quarantine to prevent re-infection elsewhere.

Orion wrote:

Unfortunately reason and logic have nothing to do with the decision the Democrat-controlled Congress will make. If they let GM go under, the UAW's free ride ends, UAW retaliates by cutting the Democrats off, THEREFORE the Democrats will pile buckets full of taxpayer money on the fire to put off GM's demise into the next election cycle.

With Democrats in control at all levels of government there's simply nothing to stop them.

Jason Bontrager wrote:

Does anyone really believe that a Republican controlled Congress would NOT act to bail out the Big Three? Maybe if Newt hadn't self-destructed, but the Bush Congress never saw an expense they didn't like:-(.

kert wrote:

Hard to disagree with Yglesias on that one.

Tom W. wrote:

Back in the days when SNL was consistently funny, there was a sketch of a Japaneese version of the Mclaughlin group (called the The Arakawa Group). They had a round table discussion of who the 'laziest American workers' were. The last guy said: "Auto Workers. UNION Auto Workers!" The rest agreed heartliy and loudly. Seems the satire isn't totally out of left field.

By the way, that was the same skit where they would cut to the monkey, say George Bush, and the monkey would puke. Good Times.

Karl Hallowell wrote:

Hmmm, the Wagner Act was passed in 1935 and signed by FDR. Worth remembering that we're still saddled with some of the debris from the last Great Depression. I hope that's enough to keep up from repeating some of the worst of the mistakes.

V-Man wrote:

Most people who worked in a union shop would have similar stories to tell. I spent my summers as a teenager in a unionized paper mill. I've seen people take 3-hour lunches. I've seen men without high school diplomas complain that the company was fleecing them because they had problems making payments on the motor boat at their (paid off) summer home. I've been paid to sit on my ass for eight hours because of union staffing rules. I've seen an executive apologizes for waking up a worker but could he sleep elsewhere where people can't see him?

Modern unions are a cancer. Hopefully we won't have to kill the patient to cure it.

Al Fin wrote:

Obama and the Pelosi congress plans to give the unions the entire US economy on a silver platter. Then when the predictable pleas for government bailouts come around, Obama will give them anything they want--if Obama is still around and if the US economy is still around.

Jardinero1 wrote:

The real problem with letting GM or Ford go under has nothing to do with what will happen to the current workforce. If GM and Ford are liquidated the plants will be sold to Toyota or Honda or some such and most of the workers will be re-hired on different terms and a smaller number will be layed off, permanently. That's not really a problem.

The problem is the retirees. They are what's killing GM and Ford. If GM and Ford are liquidated the retirement obligations are going to be nullified and the impact of that is what scares Washington. Every retiree who has his benefits axed is going to become a burden to his children and even his grandchildren.

Jeff Medcalf wrote:

And yet, if the retirees remain on GM's balance sheet, then GM cannot EVER recover. Consider my father, who was an assembler at GM for 12 years, and has been on their benefits/pension since, another 15 years or so. So they have been paying him post-work benefits longer than he worked for them! That is a burden that no company can bear, and what we are looking at with GM is what we will soon be looking at with Social Security and Medicare: benefits structured on the assumption that future income will always be not merely more, but significantly more, than past income are destined to fail, and messily.

Carl Pham wrote:

Every retiree who has his benefits axed is going to become a burden to his children and even his grandchildren.

You mean, as opposed to becoming a burden to my children and grandchildren? Bring it on.

K wrote:

I understand that the UAW has been a huge contributor to the Democratic party to the tune of hundreds of millions of dollars over the last decade or so. Too bad they didn't invest that money wisely so they'd have something for their old age.

memomachine wrote:


"The problem is the retirees. They are what's killing GM and Ford. If GM and Ford are liquidated the retirement obligations are going to be nullified and the impact of that is what scares Washington. Every retiree who has his benefits axed is going to become a burden to his children and even his grandchildren."

I believe in that instance, GM, Ford or Chrysler failing, the federal government (us) would be on the hook for continuing the benefits. But at a much reduced rate and a much less gold-plated package.

IMO the Big Three are business equivalents of zombies.

Put them out of our misery. Preferably with a shotgun.

Jardinero1 wrote:


For once I agree with you.

Fletcher Christian wrote:

I slightly hesitate to bring this into the discussion, but there is another reason for letting the "Big Three" go; the fact that both management and the unions prefer to continue the building of immensely inefficient, oversized junk gas-guzzling cars with very poor service life. Which is why so many prefer to buy Japanese cars, which are at least well made.

Incidentally, the branches of GM and Ford operating in Europe, and specifically the UK, have the same problems - although not as seriously. It's nothing to do with the potential abilities of the workers, either; British workers for Japanese car makers building in Britain consistently turn out reliable, economical cars. It's management; specifically, management that prefers an easy life to efficiency and good quality.

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This page contains a single entry by Rand Simberg published on November 17, 2008 10:07 AM.

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