Union blocks Big Three Auto Bailout in Senate Vote

     It has been reported that as a part of their contracts, some auto workers who have been laid off are still collecting benefits two, three, four years later. These type of benefits, as well as pensions and medical coverage for retirees are referred to as “legacy” costs, and coupled with poor management, they have contributed significantly to the failure of the United States automobile industry.

      Thus, as the House of Representatives under their socialist czar Nancy Pelosi approved their version of the $14billion dollar emergency bailout, the Senate, with many on both sides standing strong, rejected the bailout legislation, and rejected the compromise being presented by Sen. Corker because the United Auto Workers Union (UAW) would not agree to immediate pay cuts to put labor costs in line with other automakers in the US, such as Toyota and Nissan.

      Rather than have the union membership be a part of the solution to the looming crisis, the UAW has opted to play hardball with the Big Three as well as with Congress, but at what cost.

     Ford Motor Company has been the stronger of the three, and actually wanted to hold off on using any part of the bailout (but wanted to know it was there if needed). But General Motors has clearly stated that they will probably not be able to sustain themselves through the end of the year, just more than two weeks away. Couple that with the ripple effect on related industries, and the UAW is helping to precipitate the problem.

      I am not a fan of the bailout mania, and I believe that all three companies have alternative means of getting through this crisis. At the same time, the idea of a Chinese company buying a huge stake in a bankrupt GM is not palatable either. It is time that all sides with a stake in the survival of the automobile industry stop looking out for themselves, and begin making concessions that will benefit all in the long run.