Sunday, April 19, 2009

Chrysler and GM will soon run out of time. Both companies need to wring more concessions from debt holders and contract labor. Both companies have suffered from continuous pressure from foreign companies subsidized by national governments. The UAW has been blamed for much of the trouble. John R. MacArthur at Harper's Magazine has an opinion. Read the whole essay.

But the UAW’s critics needn’t worry. Whether Obama eases GM into Chapter 11 bankruptcy— that wonderful system of corporate protectionism— no doubt favored by Austen Goolsbee and Lawrence Summers, or whether he forces the UAW to destroy itself with givebacks, we’re headed for the end of the line for middle-class unionism.

Bankruptcy would make it easier to break union contracts, but the UAW, relentlessly attacked for being too successful for its members and so far unable to organize Japanese car plants in the United States, will probably cave in for PR reasons before it comes to Chapter 11. If that happens, it won’t be a union anymore.

Meanwhile, autoworkers (and automakers) in Japan will continue to benefit from government-funded national health insurance unavailable to American employees of non-union Japanese plants in the U.S. And Steven Rattner can go on throwing benefits for Democrats at his home on Fifth Avenue.

No comments: