The UAW big lie on killing bailout

Larry Kudlow:

After Chairman Mao's revolution about 60 years ago, people in the U.S. played the blame game by asking, "Who lost China?" Well, following the breakdown of an arduous seven-hour Senate negotiating session on Thursday night, many are asking, "Who lost the U.S. car business?" Right after the UAW vetoed a compromise, bankruptcy-lite, Detroit-little-three rescue plan put together by Tennessee Republican Bob Corker, UAW president Ron Gettelfinger played the blame game by blasting Corker and the Republican party for "singling out" union workers to shoulder the burden of reviving the U.S. car business.

In truth, the UAW is to blame. If Sen. Corker's plan had prevailed, with UAW support, many believe it would have had 90 votes in the Senate. GM could have gone forward with a clean-as-a-whistle balance sheet under a three-part restructuring plan that included a $60 billion bond-refinancing cram-down, a renegotiation of the $30 billion VEBA health-care trust, and a pay-restructuring plan that would put Detroit compensation levels in line with those of foreign transplants Honda, Toyota, Nissan, and BMW.

Average compensation for the Detroit little three is $72.31. Toyota's average wage is $47.60, Honda's is $42.05, and Nissan's is $41.97, for an average of $44.20. So Corker's idea was to bring that $72 a lot closer to that $44. (Corker notably knocked out Korean carmaker Kia, which has super-low wages.)

...

How can Ron Gettelfinger claim the union is being singled out when bondholders are taking a much bigger hit and the shareholders of the company are being virtually wiped out? Is he that blind to the sacrifices of others or is he just being dishonest?

Ron Gettelfinger has also argued that Corker and the southern senators were trying to help the foreign competitors in their states, but this deal would actually make the Big three more competitive with those manufacturers. The UAW's arguments are devoid of common sense and honesty. Waht is really going on is they are playing chicken with the auto industry expecting the Demcorats to bail them out and continue their overpriced labor arrangements for three more years, making it less likely these business will survive unless people in this country who make much less than the UAW workers subsidize them.

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