GM Bankruptcy, A UAW Bailout

As GM files for Chapter 11, we ‘should’ expect GM, the UAW leaders, and the bondholders, go enter into US Bankruptcy Court to cancel and/or reorganize the UAW employee contracts so as reasonable labor rates for GM to survive, eliminate waste, and remain in a competitive market for our consumers. http://www.freerepublic.com/focus/bloggers/2241730/posts

Dr. Mark J. Perry, Professor of Economics and Finance in the School of Management at the Flint campus, University of Michigan http://mjperry.blogspot.com/2007/07/uaw-pricing-themselves-out-of-market.html, defines the Big 3s’ employee cost. UAW employee’s total labor cost is some $150,000 annually, compared to $96,000 annually for Toyota, Honda, and Nissan. If UAW employee costs were reduced by 33% to 50%, the
employees would be left earning some $75,000 to $100,000 annually; somewhat, a comfortable living income with benefits, and competitively priced trucks and cars in the marketplace. UAW employees earn more than university professors at an average of $93,000 annually.

President Obama and his administration, as well as many on Capitol Hill, are protecting the excessive UAW employees’ cost, at investors’ and taxpayers’ expense. Our U.S. Treasury has already loaned GM $19.4 billion. Now, President Obama is ‘providing’ GM an additional $30.1 billion, in return of 60% of GM shares.

A major problem is this plan allows enormous UAW employees’ cost of labor and benefits to remain. A new UAW agreement is imparting a tiniest dental and eye care cost for retired GM employees, but it does not markedly lower the mostly excessive employee cost, which must be reduced by some 33% to 50% for our taxpayers’ protection. In lieu of reduced employee cost, GM will again require additional funding, or fall into liquidation, leaving bondholders and taxpayers with their losses.

The winners in the short-term are the UAW leaders and employees, President Obama, as well as many other Democrats on Capitol Hill and across America. This plan reimburses unions for some $300 million from the unions dues’ campaign donations, in campaign resources during Election 2008.

The losers in the long-term will be unemployed UAW employees and many others unemployed, American manufacturing as an industry, consumers, bondholders, and the US taxpayers. The most vital finality is economical constitutional freedoms with US Government ownership and management. Taking investor funds, and in return, giving bondholders only 25%, while awarding more to the accurate problem, the UAW membership, is legally robbing from the investors and giving to the unions. Government ownership, in a free economy under this plan, is pure Socialism.

President Obama, Democrats, and the UAW employees are destroying an automotive industry, leaving his/her child(ren), grandchild(ren), etc. without a good job for their own future friend(s) and family member(s) to pursue.

Oh, how shameful is personal greed in mankind!