Saturday, December 13, 2008

The Big Three - Severance, Pensions and Benefits

So now it's down to the White House who can use the tools created by Congress to manufacture the funny money to bail out the Big Three. Most believe that the unions knew it would come down to this and therefore conceded little in the way of change. They believe that Ford will survive and the other two can hold out until the new union owning Democrat Congress is sworn in.

The National Review carried a cover story by Stephen Spruiel about GM's plans to close down an assembly line at Moraine, Ohio on December 23. The reporter says the $18-15 billion bailout will not be enough and here is why:

GM's job security plan with the unions; inflexible, no way to respond to fluctuations in the marketplace. The IUE-CWA union at Moraine was able to negotiate buyouts of $70,000-$140,000 for any worker who VOLUNTARILY quits. Other workers were made eligible for early retirement. Employees who accept transfers or stay with the company will qualify for GM's supplemental unemployment benefits, meaning that GM will makeup the difference between their former wages and their state unemployment checks. When unemployment checks, now extended, run out, GM will pay these workers 95% of their former wages for up to two years.

Worker with at least 10 years seniority are eligible for that infamous job bank program that allows laid off workers to receive their regular hourly pay to sit or go, say, ice fishing. They can turn down a transfer or basically they can stay in job-bank until they reach retirement age. Nationwide, GM has about 1400 workers in job banks.

The unions are going to bluff the White House into a bailout all the while knowing that Chapter 11 would force concessions from the unions while the Big Three claim liquidation would generate a worldwide calamity. We may already be in that calamity, even the most brilliant or some insiders, can only guess at what is going to happen next.

Confused Board of Directors would probably like to see Waggoner and Nardelli ousted but they are not sure their replacements can save these sinking ships.

I guess I'd never give in without what I previously called restrictions, or get as good as you give. Probably its too late in the game. Republicans in Congress are giving President Bush some payback; in fact, everybody is playing some sort of game and the union bosses and union employees with at least 10 years seniority are going to be the winners.

I'm still betting that the White House will create the funny money for the bailout. Bush had better get the trade bill he wants with Columbia, South Korea and Peru in exchange from the Democrats. Still the somewhat innocent taxpayer will pick up the bill.

Did you see the short film on the Ford Plant in Brazil that is so automated that the unions do not want anyone to see it. If and when this kind of automation is allowed in the U.S. the number of manufacturing employees will shrink to half the size employed now.

Changes are coming in the next 10 years that will totally change the ways of manufacturing and this country to become more and more of a service country with possibly the best paying jobs will be in health care, litigation, hi-tech, environmental services and education. The union membership will rise as long as Obama reigns but eventually management and union dealings will become much more reasonable.

Or else. And the "or else" is not going to be of the liking of the so-called social moderates.


dd said...

Merle, even Bill Kristol is asking you to tone down the union bashing. Check it out:

dd said...

Merle, in case your interested here are some more facts that dispel the notion that the UAW is to blame for the current situation.