Patterico's Pontifications

9/19/2011

Good News: We Just Gave GM’s UAW Employees a Signing Bonus!

Filed under: General — Aaron Worthing @ 10:40 am

[Guest post by Aaron Worthing; if you have tips, please send them here.  Or by Twitter @AaronWorthing.]

That would be the same GM who got a $15 billion bailout:

The United Auto Workers union won $5,000 signing bonuses for its workers and a promise to reopen an assembly plant in Tennessee as part of its tentative new contract with General Motors, according to people briefed on the negotiations.

In what is being viewed as a landmark deal, the union also preserved health care and pensions and improved profit-sharing for its roughly 48,000 members who work at G.M.

(Source.)  Mickey Kaus goes into detail about how this is bad optics for GM and his points are all valid, but I worry about what kind of unfair competitive advantage that our money is giving to GM over companies that didn’t take bailout money, like Ford.  After all, companies are always in competition for the best workers, in part.

Which might explain why Ford put out this ad featuring an allegedly spontaneous reaction of an allegedly ordinary purchaser, where he makes the case to buy a Ford because it was not bailed out.  Whether it was a spontaneous reaction or a set up, however, Ford chose that one to put out as an ad, so it’s not exactly spontaneously going out to the people.

Still whether it is a cynical message on Ford’s part or not, they have a point.  The best way to prevent bailouts like this, essentially allowing for the nationalization of certain industries, is to intentionally support the private industries over the ones subsidized by the government.  If you make it sufficiently bad business to receive a bailout, most companies will refuse to take one in the first place.

Oh, and who is this John Galt guy I keep hearing about anyway?

[Posted and authored by Aaron Worthing.]

34 Responses to “Good News: We Just Gave GM’s UAW Employees a Signing Bonus!”

  1. But of course! Now on to the rest of the unions – I found it remarkable that the bonus was close to the amount a family can donate to a presidential candidate no?

    EricPWJohnson (2925ff)

  2. I’d say the UAW cut their own throats. Sure, they own a piece of GM now, but no other car company is ever going to hire UAW workers again – they own the competition!

    Moronic is the most charitable word I can think of.

    mojo (8096f2)

  3. Basically proving that GM management failed to learn its lesson about controlling costs. And it reinforces that the only success in the current political climate is crony capitalism.

    SPQR (26be8b)

  4. We need a new regulation which clearly labels all union made products so patriotic Americans can refuse to buy anything made by thugs.

    ropelight (646212)

  5. GM is refusing to honor warranties on cars they made in 2008, pre bailout, because that was ‘old GM’ and the company is now ‘new GM’.

    So they don’t honor their own product, but they have enough money sitting around for this?

    Is GM really having a hard time finding labor these days?

    Oh, and ‘improved profit sharing’. AKA we’re sucking New GM dry because we know they are too big to fail. All they are really doing is sucking the USA dry. This money came out of the pockets of our kids.

    Dustin (b2fb78)

  6. About the “allegedly spontanous reaction”: here’s a video by the guy who appears in that ad, in which he claims that yes, it was spontaneous on his part. Though since it was part of two and a half hours (he says) of footage and Ford specifically chose that part of the footage to air, clearly it wasn’t a spontaneous choice on Ford’s part — as Aaron has already pointed out.

    But don’t take my word for it, go straight to the primary source:

    http://www.youtube.com/watch?v=_e7KBxzmz9M

    Robin Munn (347954)

  7. Dustin

    yeah, my brother has a saturn vue that has a flaw in it that will eventually brick the vehicle. normally GM would have to replace it, but in all the bailouts or bankruptcies, that debt has been discharged.

    And in general the way they treated saturn is shabby.

    Aaron Worthing (73a7ea)

  8. Robin

    I suspected something like that, so I will take your word for it. :-)

    Aaron Worthing (73a7ea)

  9. … Oh hey, the hotair.com page that Aaron linked to already has the followup video I just linked. Ah well, no harm in posting the same link twice.

    Robin Munn (347954)

  10. I wonder what the odds are that GM will survive this contract?

    Another Drew - Restore the Republic / Obama Sucks! (7ce0f9)

  11. Another Drew Define “survive”. As Mark Steyn put it, a
    “benefits provider that makes cars on the side” doesn’t really need to make cars at all, considering the current source of revenue.
    I agree with Chris. Won’t by a government car. Ford’s the way to go.

    Richard Aubrey (cafc94)

  12. Does not the ObamaCare precedent mean the feds can require you to buy a car?

    jim2 (a9ab88)

  13. And in general the way they treated saturn is shabby.

    Comment by Aaron Worthing — 9/19/2011 @ 11:05 am

    Yep. First car I bought was a Saturn. An old one, back when UAW hated it.

    GM didn’t have to go the route of big and bloated and inferior. They even tried a better way, found it worked, and then squashed that like a bug.

    Unfortunately, when GM finally failed, opening up tremendous opportunity for the free market to buy up the remnants and brands and be free of self destructive unions, corrupt government stepped in and gave GM another chance. It’s very frustrating, because it’s bound to happen again.

    Dustin (b2fb78)

  14. Dustin

    > An old one, back when UAW hated it.

    Dude, they always hated it. Why do you think they killed off that division?

    Aaron Worthing (73a7ea)

  15. I heard GM offered to give the workers Chevy Volts instead of profit sharing but the union turned them down. Nobody wants those freaking things.

    daleyrocks (bf33e9)

  16. Comment by Richard Aubrey — 9/19/2011 @ 11:35 am

    Will GM still be making cars in the U.S. past the end of this contract with the UAW, is my definition of “survive”.
    Or, will they be “American Leyland”, and be sold off bit by bit to their competitors (SAAB/Hummer), or just dis-organized (Pontiac/Olds/Saturn)?

    Another Drew - Restore the Republic / Obama Sucks! (7ce0f9)

  17. Why a signing bonus? Isn’t the purpose of that to attract applicants for open job positions?

    Why would an automaker, in this economy, need to offer money up front to convince people to take an overpaid union job?

    This stinks. There is no benefit to the company. It’s judt a payoff, with government money (GM has not yet paid back uncle sam) to a favored group.

    DO NOT BUY BAILOUTMOBILES!

    Daryl Herbert (cae88c)

  18. Dude, they always hated it. Why do you think they killed off that division?

    Comment by Aaron Worthing — 9/19/2011 @ 11:58 am

    Yeah, I guess I phrased that poorly. I meant a true Saturn, not a rebadged Chevy made by UAW. For Saturn’s later years, what had originally infuriated the UAW was carefully deleted. And as you note, they eventually just deleted the entire make.

    The car was technologically kinda clunky but extremely reliable. Best GM product I ever drove. Reminds me a lot of my clunky F-150, which is also very reliable, but not cutting edge.

    The entire business model GM has had for ages is a provable failure, and yet they have doubled down on lavish union compensation, and ridiculous negotiations. GM doesn’t run any sweatshops. The unions don’t serve a purpose other than bleeding the company (and the country) dry.

    What I had hoped for was GM to be purchased by investment bankers who cut that company into pieces and sold it to folks with better ideas. GM’s investors would lose a lot of wealth, but someone would get a factory and a brand at a cheap price, and I think there was a real chance for a lot of recovery.

    Dustin (b2fb78)

  19. What I had hoped for was GM to be purchased by investment bankers who cut that company into pieces and sold it to folks with better ideas. GM’s investors would lose a lot of wealth, but someone would get a factory and a brand at a cheap price, and I think there was a real chance for a lot of recovery.

    perhaps Bain Capital???

    ColonelHaiku (601b0d)

  20. I miss nk.

    Leviticus (b85154)

  21. Tend to think of that when the Galt references start coming out…

    Leviticus (b85154)

  22. “Signing bonus” of some amount of cash in a union contract is usually negotiated by the union and agreed to by the company, when the union contract has some other bitter pill in it, like increased contribution to benefits’ plans or reduced pay increases etc. The purpose being to put a little cash under union members’ noses and make it easier for the union to convince members to vote for the contract.

    In the absence of a significant bitter pill in the contract, I fail to see what this is other than more payoffs of the UAW membership.

    SPQR (26be8b)

  23. I just spent the entire day negotiating with 3 local unions, of which my company is a union shop, in regards to our agreements with the International union, local PLA, jurisdiction, dispute resolution, and had to basically give away the farm to retain the project.

    JD (d3ede3)

  24. perhaps Bain Capital???

    Comment by ColonelHaiku — 9/19/2011 @ 12:38 pm

    Yeah, exactly. In fact, Romney would probably be excellent for this job. I’m not being sarcastic to say so.

    As I’ve said before, what Bain was doing was good.

    Dustin (b2fb78)

  25. If you think I have a foul mouf here ….

    JD (d3ede3)

  26. When it was time to buy a new truck, I went to my local Ford dealership. I did not go to a Chevrolet or GMC dealer, and never would have, after the bailout. And I won’t buy foreign cars, either.

    The workers at Ford are UAW, too, and I don’t object to that, but Ford’s leadership has earned them a solid customer for life.

    Of course, since I had put nearly 200,000 miles on my last F-150, and I’m 58 years old, the odds are that I won’t be buying a new vehicle again anyway.

    The Dana who drives a Ford (f68855)

  27. I haven’t bought an American (made in America yes but not an American company) car in almost thirty years. Quality is the first reason, unions the second.
    Call it my little protest.

    vor2 (6c8528)

  28. #26
    Dana,
    I have a cousin who went to work in unionized municipality in the late 70′s. He got a lot of grief from his co-workers about his Toyota truck; “why are you drivin that fur’n car?”
    He pointed out one of their American models and correctly noted that the engine was made in Canada, chasis in Mexico and some of the electronics in another country. Then asked them how it was really an American made car… they didn’t bother him about his truck after that.
    Always liked his way of looking at things.

    vor2 (6c8528)

  29. What a bunch of suckers! That only comes to $26 a week for the life of the contract. The older high tier people get nothing else. The low tier people, which now outnumber the older ones get a big raise. Guess who’s going to be voting this one in.

    phil (fd0080)

  30. Dana

    um, you should be an optimist about your own lifespan. :-)

    Aaron Worthing (73a7ea)

  31. I like how GM is able to disavow its warranties on pre-bankruptcy cars, yet retains Tax Loss Carry Forwards to the tune of $16 BILLION dollars.

    In any other bankruptcy, prior losses are not allowed to be used to offset profits after the reorganization.

    However, by fiat, the Obama administration is allowing this multibillion gift to the UAW to break all previous precedent, and go forward.

    At least they should try to appear consistent…

    Reference:
    http://online.wsj.com/article/SB10001424052970203609204574314180298525294.html

    nbindo (3dec33)

  32. Nbindo – after they just ignore bankruptcy laws, placing unsecured creditors ahead of secured creditors, does this shock you?

    JD (318f81)

  33. Yeah our taxpayers also go to the Teachers unions too. Why cant people give their own money to it.

    DohBiden (d54602)


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