Thursday, December 11, 2008

A bad idea, ctd.

Following up on my thoughts on the tax-incentive-to-buy-vehicles idea, I also think the opposition to the bridge-loan program based on unions is faulty.

Among other things, the alternate plan offered by Mr. Corker calls for giving the holders of bonds issued by the auto companies 30 cents on the dollar to ease the companies’ debt burden; immediately bringing workers’ wages in line with foreign companies like Nissan and Volkswagen; and forcing the United Automobile Workers to eliminate payments to workers after their jobs have been eliminated.

Largely, this is an ideological disagreement that doesn't really have any grounding in the actual realities of the situation. For starters, the job bank which so many folks have been up in arms about has already been eliminated (and, I should note, for rather good reasons since it was an imperfect concept). But, again, hurting the unions doesn't address the larger problem ... namely that the American Big Three weren't selling products that were competitive in the market.

Making the workers at these companies earn less during troubled economic times is nothing more than wanting to stick your thumb in the eye of a collection of folks who think differently than you. Whether or not you believe the agreements made with the unions were bad ideas isn't at issue here. The point is those deals are not the faults of the unions, but rather the CEOs of the companies (which is one reason I wish the House/White House plan was stronger in terms of restructuring powers).

Reducing the wages of workers is a short-term fix - and, again, one that UAW has been completely open to - but it doesn't do anything to change the faulty corporate mentality that existed in those companies. In fact, it would do the exact opposite of what is needed by reinforcing this notion of being only concerned about today rather than look down the road and focus on being viable tomorrow.


Post a Comment

<< Home