Lessons from the Auto Bailout Controversy

This past week, the US Senate failed to concur with the House of Representatives in passing a bailout package for the nation’s large domestic automakers. This bailout had the support of the Democratic leadership in Congress as well as the Bush White House. Already, doomsayers are bemoaning this lack of financial infusion from an already depleted federal budget. However, I applaud this decision as a victory for principle over pragmatism. Hoping that conservatives will learn from this effort to continue enlarging government, consider some lessons from the bailout controversy.

UAW drops labor dispute in Tennessee

United Auto Workers has given up on its attempt to challenge an unsuccessful attempt to unionize a Chattanooga-based Volkswagen plant. Though leaders had filed a dispute with the National Labor Relations Board seeking a new vote, the labor union suddenly withdrew the challenge yesterday:

In an abrupt turnabout, the United Auto Workers on Monday officially dropped their attempt to get the federal government to order a new organizing election at a Volkswagen plant in Chattanooga, Tenn.

The union said that it was stymied by the refusal of state Republican officials to testify at a hearing before the National Labor Relations Board.

The union also conceded that even if it the NLRB had agreed to its complaint and ordered at new election at the VW facility, it ran a serious risk of getting a second rejection from the workers.

“The UAW is ready to put February’s tainted election in the rearview mirror and instead focus on advocating for new jobs and economic investment in Chattanooga,” said Bob King, the union’s president. A regional hearing on the case was set for Monday morning, but UAW instead officially notified the NLRB it was withdrawing its complaint.

Today in Liberty: Some Dems missing from “talkathon,” election day in FL-13

“The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws.” — Ayn Rand

— Oh, Fox News, STAAAAAHP: Another morning, another anti-Edward Snowden rant on Fox and Friends. “Edward Snowden is a terrible person, the worst in the world. Here’s a clip of Charles Krauthammer agreeing with me.” Yeah, there are some legit complaints about Snowden, like his seeking asylum from Russia, not exactly a bastion of liberty, but the guy tried to handle things the right way by taking his concerns about the NSA’s surveillance programs to his superiors. They didn’t listen, so he went to the media. In our minds, Snowden is more a hero than anything else for exposing programs that ignore the protections guaranteed in the Fourth Amendment. We also believe that he’s raised some other excellent points about the federal government wasting its resources. But neo-cons are gonna neo-con, and don’t you dare ever question them.

Tennessee Volkswagen employees reject United Auto Workers

Volkswagen Chattanooga plant

United Auto Workers attempt to unionize workers at a Tennessee Volkswagen plant was defeated in a close vote on Friday, delivering a blow to the union’s attempt to organize in a right-to-work state, despite the endorsement of auto maker:

Workers at a Volkswagen factory in Tennessee have voted against union representation in a devastating defeat for the United Auto Workers union’s effort to make inroads in the South.

The 712-626 vote released late Friday was surprising for many labor experts and union supporters who expected a UAW win because Volkswagen tacitly endorsed the union and even allowed organizers into the Chattanooga factory to make sales pitches.

“This is like an alternate universe where everything is turned upside down,” Cliff Hammond, a labor lawyer at in Detroit, told The Wall Street Journal, noting that companies usually fight union drives.

“This vote was essentially gift-wrapped for the union by Volkswagen,” said Hammond, who previously worked at the Service Employees International Union.

The setback is a major defeat for the UAW’s effort to expand in the growing South, where foreign automakers have 14 assembly plants, eight built in the past decade, said Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research, an industry think tank in Michigan.

Another bailout for automakers?

Via the Heritage Foundation, the Government Accountability Office says that Government General Motors needs more taxpayer money to survive:

The report finds GM and Chrysler may have unfunded liabilities for their pension programs. These obligations could have been terminated if these companies had filed for a typical bankruptcy. They were maintained, however, after the government assumed sponsorship during the most recent crisis. Should these companies be unprofitable, these unfunded liabilities will be unmet by GM and Chrysler as soon as 2013.

The report explains why:

Officials at the Department of the Treasury, which oversees TARP, expect both GM and Chrysler to return to profitability. If this is the case, then the companies will likely be able to make the required payments and prevent their pension plans from being terminated. However, if GM and Chrysler were not able to return to profitability and their pension plans were terminated, PBGC would be hit hard both financially and administratively.”

Should these companies continue to face losses, GAO estimates that for years 2013 and 2014 pension liabilities could cost GM over $12 billion, and Chrysler over $2 billion, to combine for “about $14.5 billion” picked up by PBGC. And that’s only by year 2014. It’s likely taxpayer money will be needed for future years.

For those of you unfamiliar with PBGC, that is the Pension Benefit Guaranty Corporation, an arm of the government.

They Still Don’t Get It!

I suppose that credit should be due to Senate Republicans who made the difference in defeating the Auto Bailout. I also believe that President Bush’s brazen act of shifting money to the automakers is shameful operation.

But then Senate Republicans release a letter pleading with President Bush not to usurp the decision of Congress on the automakers bailout.

So far, so good.

But then these Senate Republicans gave their reason for opposing the bailout as the refusal of the United Auto Workers to agree to a cut in wages.

These folks still don’t get it!

The views and opinions expressed by individual authors are not necessarily those of other authors, advertisers, developers or editors at United Liberty.