UAW Benefits from Failure

Now that the bailout has been secured the UAW has, predictably, decided it will not work to make the automakers viable.

IBD asks, can we get our money back?

The government gave the Big Three a $17.3 billion bailout based on the idea that both management and the unions would make concessions. Now the UAW says no thanks. Can we have our money back?

Last week's deal was supposed to hold both the managers' and unions' feet to the fire. In handing out the taxpayer money, the White House insisted the auto union cut worker pay roughly to the levels of their successful competitors, Toyota, Honda and Nissan.

For $17 billion in emergency bailout cash and possibly much more later, it was a reasonable request. As President Bush said, "The time to make the hard decisions to become viable is now — or the only option will be bankruptcy." He added that a deadline of March 31 for the industry to prove its "viability" and other limits "send a clear signal to everyone involved."

Well, if so, the United Auto Workers didn't get it.

And, how could they have gotten it? Did we really expect anything different?

This is tantamount to an intervention being planned and carried out by the largest of enablers. The intervention was a no strings attached permission slip to an ever-flowing liquor cabinet. The UAW knows this first paltry stipend (if 17.3 billion could ever be considered paltry) is but one of several more (less paltry) installments to come.

"Ron, we need you to stop that drinking. It is killing all of us. And, as an incentive for doing the right thing, here is a shot of Bourbon."

We need to exit out of the fantasy land where companies can remain viable when not profitable, the land where finger crossing carries the same logical weight as does cutting costs.

If we want to save the domestic automobile industry, we need to save it using tough love measures, measures designed to force all parties to tow the line when it comes to regaining profitability. That the UAW is refusing to, and that the government will allow them to refuse to do so, speaks volumes about how successful these bailout tactics will be.

How many billions of taxpayer money will we waste in the interim, hoping upon hope, that all interested parties will reach the same conclusion, all on their own, especially when we grant incentives that will do nothing but sow contrary opinions?

The bailout has given the UAW incentive to resist making the changes it must make for the auto companies to remain viable. Future bailouts have now become part of the equation and it is money that the UAW is banking on.

When the UAW benefits from failure, should we expect success?