Columbus crew November 14, 2008
Posted by thesurrealtimes in : Uncategorized , trackbackSchumer: On board the GM/UAW bailout express
Chuck Schumer, who seems to have been on top of everything the last couple of years except making sure that his Wall Street friends weren’t collapsing the economy while he was representing them and gathering money and power for the Democratic party, now seems to be on board for bailing out GM and the UAW.
We don’t, mind you, have a release in which he explains his thinking, tells his constituents why he thinks they should spend some billions of their dollars on a car company that has been flailing for years, and lays out the exact parameters of the legislation he would support. But he dribbled it out the last couple of days on Bloomberg and Reuters and in the Washington Post.
And today, in Washington, he made some remarks that were recorded by Newsday’s Juliann Vachon: “The automobile industry is too important to just let the Big Three or any one of the Big Three go under.” Her full story from tomorrow’s paper is after the jump.
Schumer qualifies his support with what he calls “conditions” — limits on excessive executive pay, a demand that when (if??) GM recovers the government will get the money back, and a recovery plan. He told the Post that he wants “some assurance that they’re not going to come back and ask for more money six months from now.”
That, however, is the rub.
Congress already passed a $25 billion loan for GM to “re-tool” its plants. Now, Dems are supporting another $25 billion to make sure GM doesn’t have to file for bankruptcy next month. Except that today, there’s a story saying that Obama is thinking it may take $50 billion, instead. And, if you read carefully, you’ll see that the UAW expects yet another $25 billion down the road “to cover the first payments to a union-run trust that will take over retiree pensions and health benefits from the car companies.” Oh — and maybe Ford and Chrysler would each get $25 billion too.
As we’ve noted before, GM is a company that has been losing market share for 30 years because it has bad management, pays non-competitve wages to UAW workers and non-competitive benefits to UAW retirees, and has never innovated or marketed or priced well enough to match Honda and Toyota in giving people the kind of cars they want.
Now, with that terrific history, Barney Frank — the same guy who crafted that airtight Wall Street $700 billion bailout legislation that has allowed companies like AIG to come back to the trough repeatedly — is going to have legislation to rescue GM ready for hearings next week! And Chuck Schumer is trying to pretend he’s very fiscally responsible by saying he expects ’some assurance that they’re not going to come back and ask for more money six months from now.’ “
He will demand that they have a plan. Presto, fixo!
One of the things that would help provide such assurance would be insistence by Schumer and other Democrats that the UAW make major concessions in their non-competitive contract and their non-competitive retirement plan as a condition of Congress approving one dime to bail out their jobs. Will Chuck Schumer demand that?
So far, you don’t hear him or any other Democrat saying that. You hear them avoiding saying that. The reason: It would appear that this whole thing is designed as a pay back for the UAW and big labor generally providing a lot of help to elect Obama and the Democrats this year. The whole point is that the union doesn’t want to have to make big sacrifices to make its company competitive — it wants the taxpayers to do it for them.
These days, you have to get the quotes from the Republicans. Here’s Spencer Bachus, a Republican senator from Alabama: “Why are you going to take my tax dollars and give it to a company that pays their employees $75 an hour? I think people that are going to be more hostile is the saw mill worker in my district who is only making $15 an hour.”
As we noted yesterday, GM spent $17 million on Viagra in 2006 as part of its UAW and executive benefit package. Meanwhile, out here in Television Land, some squeezed companies are providing pensions of zero for their workers and tripling the cost of their heart attack drugs. And now, Schumer wants those people to help subsidize erectile dysfunction drugs at GM?
Is this really what Joe and Eileen Bailey of Massapequa are dying to do with their money?
We called Schumer’s press office today to ask that question, and we didn’t get a call back. If
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