Wednesday, April 1, 2009

UAW of Obama

"Earlier this month Ron Bloom and Steven Rattner, key figures on the Obama auto task force, traveled to Detroit and met with United Auto Worker President Ron Gettelfinger. Their meeting was off the record but presumably it was cordial. Mr. Rattner may be a Wall Street financier and Mr. Bloom a restructuring expert -- but both now are part of the Obama administration and UAW workers and retirees supply the Democrats with massive votes and manpower in key battleground states of the Midwest.

"'It would be hard to win the presidency again if everyone [in the upper Midwest] is out of work,' notes Forbes Magazine's veteran auto specialist Jerry Flint. 'General Motors will get the money to survive for sure. There is no way any administration would risk losing an election for a few billion dollars.'

"The UAW's Mr. Gettelfinger and GM's now-former CEO Rick Wagoner actually deserve credit over the last couple years for major surgery on GM's labor costs. During the crucial negotiations 18 months ago, however, Mr. Gettelfinger took a rare public snipe at Mr. Wagoner for not personally showing up at the bargaining table. He heaped praise instead on GM CFO Fritz Henderson. Now Mr. Wagoner is out courtesy of the Obama administration -- which tapped Mr. Henderson to take over.

"Look also at the standoff between UAW workers and GM bondholders that's been holding up a government-sponsored reorganization. Some of those unsecured bondholders bought the GM debt that was used to finance the UAW health care trust -- and now they're being offered 33 cents on the dollar while the UAW trust is being offered 50 cents for essentially the same IOUs.
All this means you can expect the fine print of any GM bailout deal to leave the UAW plenty of reason to be grateful to the administration. Watch what Team Obama does, not what it says. Mr. Henderson, a GM lifer, wasn't picked to wage war on the UAW or radically shrink the company and thus employment. On the contrary, don't be surprised if the administration finds ways to sweeten the deal by funneling taxpayer dollars to the UAW that bypass GM, such as by subsidizing the UAW health care trust directly."

-- Brendan Miniter and Holman Jenkins, Wall Street Journal

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