Right Thinking From The Left Coast
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The government and a health care fund now own a car company
by JimK

You know...I realize that I should try to analyze this and have something to add, but every time I try, my brain just screams “WHAT THE FUCK?” WHAT THE FUCKING FUCK?”

The United Auto Workers union’s retiree health-care fund will own 55 percent of Chrysler LLC in exchange for cutting in half the automaker’s $10.6 billion cash obligation to the trust, people familiar with the matter said.

Under the terms of the contract, the trust would get representation on the company’s board of directors, said two people briefed on the deal, who asked not to be named because the matter is private.

The tentative agreement was approved unanimously by UAW leaders yesterday and will be sent to union locals for ratification, one of the people said. Chrysler, operating with $4 billion in U.S. loans, faces an April 30 deadline to restructure its costs or risk losing government support.

WHAT. THE. FUCKING. FUCK? How is this even remotely acceptable to anyone except people who love gigantic, socialistic government and, of course, the union that is sucking the last drops of blood out of the industry.

It’s not even the UAW proper. It’s the fucking health care fund, THAT’S how out-of-control union health care costs are with regards to American car companies.

Why is everyone not extraordinarily angry about this?  Are we reduced to quibbling about Arlen fucking Specter while this shit goes on right in front of our noses?  I’m as guilty as anyone, but maybe it’s high time we checked ourselves.  Stop buying into the media bullshit where stories get released as cover for what is really happening.  This is big, and we should be angry.

So are you?

Posted by JimK on 04/28/09 at 08:35 PM (Discuss this in the forums)

Comments


Posted by Hal_10000 on 04/28/09 at 09:04 PM from United States

I posted on the last week and the deal gets worse all the time.  The UAW gives $10 billion and gets a 55% stake.  The bond-holders kick in $27 billion and get a 10% stake.  How’s that again?

This is why this needed to go to bankruptcy court.  A judge may not make the best decisions, but they won’t be as political as the ones the White House is making.

Fortunately, they need 90% of the bond-holders to approve.  That’s not going to happen.  Which probably means Obama will force them to do it anyway.

Posted by on 04/28/09 at 09:18 PM from United States

Wow, the health care fund had ten billion to give? I thought the economy was on the brink of collapse, but the health care fund of a union had ten billion to throw around.

Gee. That doesn’t seem out of whack at all.

Posted by Aaron - Free Will on 04/28/09 at 09:31 PM from United States

Apparently, the health care fund is being “paid” equity instead of cash conributions, rather than actually buying it?

Hal, can you give me the Financial Accounting 101 version of exactly who is getting shafted here?

Posted by on 04/28/09 at 09:33 PM from Germany

Shit, that was freaky--I comment about this in another post, and Jim makes a post about it right about the same time.

Posted by on 04/28/09 at 09:42 PM from United States

amazing.  don’t the bond holders have some kind of legal recourse here?

i predict the UAW runs the company into the ground with the same union bs that’s wrecked it so far.  in the process, their pension fund goes belly up and we wind up having to pay for that, too.

Posted by on 04/28/09 at 09:56 PM from Germany

Just to be sure--since the workers own the means of production, can we now call Obama a Marxist?

Posted by Hal_10000 on 04/28/09 at 09:58 PM from United States

Hal, can you give me the Financial Accounting 101 version of exactly who is getting shafted here?

I wish.  The details are complex and seem to change by the hour.  I think I also, in my first comment, mixed up the details of GM’s and Chrysler’s bailouts.

Posted by on 04/28/09 at 10:19 PM from United States

I hate to say it, but we are going to go the same path as any country or society before us. Collectively watch things crumble (as we have done). The government always has the upper hand, because people always think they are the ones coming to the rescue, not the ones who made the disaster, or made a disaster worse in the first place. I still think the Dow will go 4500 or lower. It won’t be today, but it will head there before we get back to 14000. Probably before we even touch 10 again. We will become a stagnant socialized society.

Posted by Ed Kline on 04/29/09 at 01:00 AM from United States

This is big, and we should be angry.
So are you?

nope...couldnt care less, I drive a Hyundai.

Posted by on 04/29/09 at 01:02 AM from United States

nope...couldnt care less, I drive a Hyundai.

Wow, that’s missing the point so epically that you came close to hitting an entirely different point but missed that too.

Posted by West Virginia Rebel on 04/29/09 at 02:02 AM from United States

I have to agree with Jim-this stinks like raw sewage at high tide, and not just because it’s a sweet deal for the unions. Was this what the American people signed on for when the auto companies went to the Senate begging for more cash?

Call me crazy, but I think the unions will now have their hooks even deeper into the Democratic Party than they did before. “Saving he workers,” indeed.

Posted by Ed Kline on 04/29/09 at 03:00 AM from United States

Wow, that’s missing the point so epically that you came close to hitting an entirely different point but missed that too.

Yes thats it...I didnt understand the ‘point’!

It was a joke dumbass.

As for the point?! No I’m not mad. We asked for this. We asked for this when republicans supported George the younger unquestioningly, we asked for this when W rubber stamped the biggest increase in spending in history while mouthing platitudes about smaller government. We asked for this when the republican party alienated the middle so thoroughly that the election was nothing more than a formality.
That set the plate to get an avowed socialist fresh out of the Chicago Machine elected president. What do you expect of Obama? I for one expect him to act like a leftist in the pocket of unions.

Am I surprised??! no! Am I angry?! Exactly who am I supposed to be angry with?!

The constitution now means whatever someone wants it to mean according to the context of the times. They (SCOTUS) might as well be interpreting the nutritional information on the side of a Cheerios box. A document that can mean anything means nothing. The national debt is climbing so steeply that its mind-numbing. The banks and now apparently the auto industry are being nationalized, and the average citizen is more interested in who is getting booted from DWTS!
I was angry 6 years ago, now I am not even sad, just numb.
Rome is burning, the Titanic has already hit the iceberg, and the band is playing on.

Game over, everyone loses. Hopefully the slide will take a lot of time.

Posted by HARLEY on 04/29/09 at 05:04 AM from United States

The constitution now means whatever someone wants it to mean according to the context of the times. They (SCOTUS) might as well be interpreting the nutritional information on the side of a Cheerios box. A document that can mean anything means nothing. The national debt is climbing so steeply that its mind-numbing. The banks and now apparently the auto industry are being nationalized, and the average citizen is more interested in who is getting booted from DWTS!
I was angry 6 years ago, now I am not even sad, just numb.
Rome is burning, the Titanic has already hit the iceberg, and the band is playing on.

Game over, everyone loses. Hopefully the slide will take a lot of time.

And people wonder why i keep buying more ammo....

Jim, im not shocked, we saw this coming despite the platitudes from, the let that they were not on this track.
This did not start with W, it started way back when, but W did give the shitball a good roll in O’s direction.

Posted by on 04/29/09 at 06:56 AM from United States

Who cares really? The UAW can now finish off Chrysler.

I will not buy a chrysler and support this kind of happy horseshit.

I will revolt (not pay taxes) if/when the government asks us to pay for UAW and or State/Federal/Teachers Union pensions that are not sustainable.

Fuck them.

There is no free lunch no matter how big or how well connected your union is.

I will leave the country if need be.

End of story.

Posted by on 04/29/09 at 07:03 AM from United States

It was a joke dumbass.

Proper punctuation and capitalization help a joke to be seen for what it is. When you type like an idiot, people will naturally assume you’re an idiot when you say stupid things. Dumbass.

Posted by on 04/29/09 at 09:25 AM from United States

I’m looking forward to seeing the UAW go on strike against itself.

Posted by on 04/29/09 at 09:33 AM from United States

The UAW will own 39% of GM if that restructuring goes as expected. I feel sorry for Ford. The UAW will really put the squeeze on them now.

Posted by on 04/29/09 at 09:52 AM from United States

Give it a year or two - GM and Chrysler with both be gone and Ford will be owned by Hyundai…

This might be just the wake up call that people need to realize that governments don’t actually know crap about running a business, much less the economy…

Posted by Ed Kline on 04/29/09 at 09:52 AM from United States

Rann, please tell me you’re just a little bit religious...at least a little bit. As that its obvious were not gonna get along anyway, it would make it so much nicer for me if you’re a person of faith.

Posted by on 04/29/09 at 09:59 AM from United States

Angry?  I’m numb.

Posted by on 04/29/09 at 11:05 AM from United States

Ed, please tell me you have cancer… at least a little bit. As it’s obvious you will provide nothing of worth to the human race, it would make it so much nicer for me if you were going to die.

Posted by on 04/29/09 at 11:26 AM from United States

My 24 month forecast:
After the UAW runs GM and Chrysler into the ground, Ford will stand as the only American car company and then the UAW will concentrate their scourge on them. Toyota then buys them, absorbs Ford’s truck technology, and dissolves the car unit.

Presto change-o, no more US car industry except for foreign manufacturers. That is, of course, until ...

The UAW unionizes the foreign manufacturers’ factories and drive manufacturing jobs out of the US once and for all.

In 5 years or less, the UAW will die and the US government picks up the tab for all of those workers.

Ahhh, I love the smell of napalm in the morning.

Posted by Ed Kline on 04/29/09 at 11:35 AM from United States

Ed, please tell me you have cancer… at least a little bit. As it’s obvious you will provide nothing of worth to the human race, it would make it so much nicer for me if you were going to die.

Really??! Thats it?! Wishing death on me? Thats all you got?
Well, I was really hoping for more. You’re no Thrill. Heck you might be even more anemic than Manwhore. You may very well be not worth the calories it takes to type. :(
Still if it makes you feel better, I dont know I dont have cancer. maybe if you pray hard enough…

Posted by on 04/29/09 at 12:12 PM from United States

Speaking of providing nothing of worth to the human race - we are still talking about “faith”, correct?

Posted by Ed Kline on 04/29/09 at 02:20 PM from United States

we are still talking about “faith”, correct?

Well I sure as shit wasnt.

Posted by on 04/29/09 at 04:11 PM from United States

Hal, can you give me the Financial Accounting 101 version of exactly who is getting shafted here?

I wish.  The details are complex and seem to change by the hour.  I think I also, in my first comment, mixed up the details of GM’s and Chrysler’s bailouts.

I figure if Hal can’t explain it, nobody can.  In fact, nobody has.  My question is if nobody can explain it, why are so many of you pissed off?  I get it that it’s directed at the UAW, but why?  I read the other day that 48% of the blue collar work force doesn’t have paid sick leave.  Is there some resentment going on because the unions are in a position to get a better deal for their members?  And please don’t give me the bs about unions pricing American cars out of the market.  Universal health care would even things out...but we don’t seem to want that, now do we?  So much of union bashing sounds like sour grapes to me.  Why shouldn’t you be happy that someone can have a middle class life style working for the man?!

Posted by Aaron - Free Will on 04/29/09 at 04:29 PM from United States

I read the other day that 48% of the blue collar work force doesn’t have paid sick leave.  Is there some resentment going on because the unions are in a position to get a better deal for their members?

My problem is that, at this point, it basically sounds like the federal government is buying out a car company for the UAW leadership.

They’re welcome to run the company into the ground if they like (and they have, and health care is only one facet of the problem), bankrupt it entirely. They likely will. I’m less interested in seeing them do so with billions of dollars of non-union, non-autoworker taxpayer dollars at stake.

It’s offensive that the government would be taking a stake in a company that, by all rights, should fail. It’s even more offensive that UAW bosses are, as far as I can tell, going to enrich themselves in the process. There is no way the UAW would otherwise be able to get this deal without federal strongarming to back them up.

Posted by Aaron - Free Will on 04/29/09 at 04:30 PM from United States

...and for what it’s worth, I grew up in one of many cities around this country where unions hire non-union temps to picket non-union shops for treating their employees better than union shops are required to do.

One of the last independent grocers in Southern Illinois was put out of business by those worthless hypocrites intimidating customers until the employees were left jobless.

Posted by on 04/29/09 at 05:10 PM from United States

Jane, [Beano], you ignorant slut!

Even in your demented leftard world are you asking us to believe that the UAW was not THE cause of GM and Chrysler not being competitive against all the other car companies? There for causing their demise?
Yeah there’s a lot of nuisances evolved but at the end of the day the UAW and it’s 10 billion dollar purse killed the golden goose.Or will very soon.

Oh and:

I read the other day that 48% of the blue collar work force doesn’t have paid sick leave.  Is there some resentment going on because the unions are in a position to get a better deal for their members?

I see your’re still getting your facts from the Atlanta Urianl and Constipation.

FWIW my youngest bought a new G8 last month, and as how the “precedent” has guaranteed his warranty let’s hope he isn’t forced to dip into say… the Teacher’s Union Fund to correct any union worker’s mistakes.
But I’m not union bashing… really.

Posted by Aaron - Free Will on 04/29/09 at 05:21 PM from United States

One thing worth adding, Beano, is that you suggest single-payer healthcare would put us on an equal competitive footing with foreign automakers.

In fact, many of the foreign automakers manufacture right here in the United States, while the Big 3 get a lot of their parts and assembly done in Canada or Mexico.

Long story short, it’s simply about legacy costs that were agreed to in fat times, with both greedy union bosses and incompetent management unable to understand that things wouldn’t always be so easy.

Posted by on 04/29/09 at 06:47 PM from Germany

I read the other day that 48% of the blue collar work force doesn’t have paid sick leave.

I don’t get paid sick leave, and I work for the US Air Force. So I really don’t care if people don’t get paid sick leave.

Is there some resentment going on because the unions are in a position to get a better deal for their members?

There’s not resentment, it’s worry, and for damn good reason--primarily, because one of Ford’s main competitors is now owned by its primary workforce, and the OTHER competitor is owned by the government.  In other words, the one American auto company that didn’t take a taxpayer bailout is now in a position where they can get squeezed out of the market because they can’t compete with the government’s ability to keep GM afloat with constant cash infusions, and the UAW will be in a position to collude with Chrysler to put the screws to Ford financially at a time when it can least afford such strong-arm tactics.  The potential here is that Ford will either be forced to come under the government umbrella as well (for the simple crime of NOT stealing our tax dollars), or its execs will try to head that off by liquidating the company entirely and putting the final stake in Detroit’s coffin.

A company owned by a union isn’t completely bad, unless that company is a multi-billion dollar corporation--see the fiasco with United Airlines a few years ago.  That is a union-owned company as well, and it sure didn’t save them when the last recession hit after 9/11.  Unions nowadays are primarily invested in padding their own coffers and setting employees against their employers, not in ensuring that their company remains financially solvent and can keep people employed. 

Universal health care would even things out...but we don’t seem to want that, now do we?

Sorry, that particular bit of sarcasm isn’t going to wash when Obama will add $13 trillion to our national debt without “universal health care.” Adding this to the mix is just going to put our country further into the financial hole--the money is not there to pay for it, unless Obama sends inflation through the roof.

Why shouldn’t you be happy that someone can have a middle class life style working for the man?!

I wouldn’t pay someone who worked for McDonald’s or Wal-Mart a “middle-class wage” and I don’t think unskilled auto workers should be paid that way either if it causes their company to go under without the government bailing them out.

The problem isn’t the workers pay, though--it’s the pensions that are the albatross here.  Rather than encourage workers to use matching company donations to set up long-term bond purchases or investments for their retirement, the Big 3 (and many other companies, including the government) made the mistake of paying a set pension, most of the time at levels far beyond what the individual and the company actually contributed to the pensions themselves.  So it falls on others to make up the difference, which is basically robbing Peter to pay Paul.  That is certainly not fair in any sense of the word.

I would love to take the retirement contributions the Air Force is providing and set that aside in CDs or a mutual fund, but I can’t.  The most I can do is keep track of what is deposited by the time I retire and pay back to the government the extra amount.  It’s money I didn’t earn, so why should i keep it?

Posted by on 04/29/09 at 07:31 PM from United States

You know, when you think about it, isn’t “union-owned company” a bit of an oxymoron?

I mean, isn’t part of the whole premise of a union that they’re someone outside the company ownership, and thus have more of a stake in watching out for the workers than the company’s profit margin? If the union owns the company, isn’t that basically just a company that takes part of their workers’ wages for the privilege of working there?

And isn’t that… y’know… one of the things unions were formed to stop in the first place?

Posted by on 04/29/09 at 08:14 PM from United States

Some very interesting facts.

http://www.velociworld.com/Velociblog/Oldvelocity/003388.html

Posted by on 04/29/09 at 08:32 PM from Germany

And isn’t that… y’know… one of the things unions were formed to stop in the first place?

Well, it depends.  In the US, the idea behind unions during their inital formation was to stop viscious exploitation of the workers, and considering the conditions many industrial and factory workers dealt with, this was not an unreasonable goal.  American unions, to their credit, are responsible for many benefits that workers enjoy such as the 40 hour work week/ 8 hour work day.

However, the ultimate goal of a classic “Marxist"-oriented union is the ownership of the means of production by the workers.  This happened after Lenin took over, for instance, where classical marxism was put into place on a nationwide scale, and was only modified to passing ownership to the “state” (controlled by the “workers” in name only) when Russia became a basketcase after WW1 and the Bolsheviks were nearly defeated by the US, Britian, etc.

Keep in mind that Marxism isn’t necessarily a devotion to “the state”, because Marxism is at its heart an apocalyptic philosophy that presumes the end of ALL governments through world-wide revolution and the establishment of a harmonized “collective” in its aftermath.  At the head of this “collective” is what amounts to a philosopher-king that can presumably wisely act as a figurehead for the masses that they can turn to in times of trouble.

As an aside, Marx’s proclamation that religion was the “opiate of the masses” reveals envy rather than contempt--Marxism was meant to be a substitute rather than a destroyer of the presumed devotion to religion.  Marx was really no different than your average televangelist.

So no, it’s really not outside the bounds of the union philosophy for the workers to own and even run the companies.  It’s just developed differently in the US because the country never really lost its devotion to capitalist economics when the unions originally formed, and communism was successfully marginalized enough in the post-Wilson era that even that fucking communist sympathizer FDR wasn’t able to destroy that attachment completely.

Posted by on 04/29/09 at 09:09 PM from United States

And please don’t give me the bs about unions pricing American cars out of the market.

And don’t give me the BS about how bad loans given out by banks helped cause the economic crisis. I guess if you want to just blindly ignore things, it makes promoting a point of view a whole lot easier.

True, pushing big SUVs after they had peaked, and not focusing enough on the consumer is certainly part of it. So was labor and making it difficult to make a profit, and actually helped with huge losses. As far as a middle class lifestyle, it’s strange you don’t hear about autoworkers working for a Japanese maker in the US crying about how they have to eat dog food every night, and sleep under some newspaper in an alley somewhere. Here’s just one of many Harbour Reports. Kind of an analysis of the industry.

2007 Harbour Report

The United Auto Workers and Canadian Auto Workers were more proactive in 2006 than ever before in creating a more competitive environment among the companies whose hourly workers they represent. Chrysler, General Motors and especially Ford negotiated more flexible local labor agreements prior to this summer’s pivotal national talks with the UAW. However, they must go further to overcome their persistent health care and pension cost disadvantage vs. Honda, Nissan and Toyota. Restrictive labor agreements that create cost disadvantages still exist and could jeopardize the survival of certain automakers.

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