As of last night, Senate negotiations to loan money to GM and Chrysler fell apart over the issue of UAW wage and benefit concessions. The UAW’s ability to run roughshod over corporate management is one of, if not the, most important factors that has brought the U.S. auto industry to the brink of collapse. The U.S. auto industry cannot survive, even with a bailout, with the present structure of unsustainable wages, benefits, and equally important, work rules.
A good argument could be made that the Senate should not be involved in negotiating the nitty-gritty of an auto industry restructuring. A better argument could be made that if the Senate doesn’t impose wage and benefit concessions now as a pre-condition for financing, then such concessions never will be forthcoming outside of a bankruptcy proceeding.
Only Senate Republicans can force through the structural changes needed to breath new life into the U.S. auto industry. Unions donated hundreds of millions of dollars to Democratic candidates and pro-Democratic issue advertising. There is no way that Democratic Senators or an Obama administration could play hardball with unions, and the Bush administration is just running out the clock. Auto industry executives have no credibility with the unions, which have out-negotiated the executives for decades.
If not Senate Republicans, who? If not now, when?
UPDATE: What a Union contract, with thousands of work rules, looks like Here
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