The U.A.W.: the enemy of turning around the Big Three

Comment: The Big Three is more like the Big One (GM), the Half Pint (Ford), and the Dwarf (Chrysler).

Seeking Aid, Automakers Have a Friend in the U.A.W.

Excerpts:

Ron Gettelfinger, president of the United Automobile Workers union says:

“It’s not just G.M. going bankrupt, ... It’s all the rest of the industry that goes with it. Two of the three companies would go under, and there’s a high probability all three would go.”

The problem (high wages relative to Honda, Nissan, Toyota - even in the US where these "foreign" makers have plants!):

Mr. Gettelfinger expects the union to be labeled part of Detroit’s problems, and to defend its $27-an-hour wages and top-of-the-line health care benefits and pensions.

...

... union rules that provide workers with 95 percent of their wages while on layoff and other job-security provisions.

The Future of the U.A.W. is at stake.

“The future of the U.A.W. will be determined over the next two weeks,” said Gary N. Chaison, a professor of labor relations at Clark University. “If G.M. goes bankrupt or doesn’t get a bailout, it’s just going to be a shadow of what it was 50 years ago.”

Why the Democrats care so much (and the Republicans so little!):

The U.A.W. was instrumental in the pivotal victories in Michigan and Ohio by Barack Obama in the presidential election, and two union loyalists in Michigan, Gov. Jennifer M. Granholm and former Representative David E. Bonior, are members of Mr. Obama’s economic advisory team.

Why bankruptcy of GM is better than a bailout:

A carmaker’s bankruptcy would abrogate workers’ contracts

Final comment: A bailout of GM would not solve the seminal problems: high labor costs, rigid Union rules, and bad management.