Such A Deal
According to MSNBC Tennessee Republican Bob Corker is pivotal deal-maker in Thursday talks
Corker has crafted a separate, three-pronged plan:
- It would require the two firms closest to bankruptcy, General Motors and Chrysler, to reduce their debt by two-thirds. Bondholders would have “plenty of incentive to make sure that the debt is reduced by two-thirds” or risk losing even more if the firms go into Chapter 11, where their bonds might be further discounted, Corker said. “We’re going to force them into bankruptcy if they don’t do this,” he said bluntly.
- He also would require that the Voluntary Employee Benefit Association, the entity created by the car firms and the UAW to handle retiree health care benefits, accept stock in lieu of half the cash payments due. The carmakers had agreed to fund VEBA but can no longer afford to do so. “If a company goes bankrupt, these future payments are never going to happen anyway,” he said.
- Finally, Corker’s bill would force the UAW to lower its members’ wages to the level of workers at the American “transplants,” the factories in Tennessee and other states owned by Toyota, Hyundai and other foreign car companies.
He only talks to management, but two of his three points require the workers to give away benefits. No mention of what management has to give up in his deal. Management made the wrong decisions and management is asking for the loan, but all of the pain is coming from the workers.
If Mr. Corker knew anything about labor unions or contracts, he would have known that union officials don’t have the right to make the kind of deal he has proposed. The package would have to be put to a vote of workers, which might take a week or more, even if the union officials agreed. He apparently is unaware that unions practice democracy with elected leaders and major decisions made by a vote of the entire membership. Democracy is slow and messy, not at all like the Senate where a few people can decide to throw 3 million people out of work.
CNN is now saying that the White House will probably make some of the Wall St. bailout targeted for Big 3. Even the White House understands how bad it would be if the auto companies even attempted a chapter 11 bankruptcy. The problem with outsourcing is that many of the suppliers whose bills wouldn’t get paid because of a chapter 11 would probably be forced out of business.
6 comments
…the UAW has already been working with the Big Three on wage and benefit reductions that would go into effect by 2011, but one report I read suggested that Corker and the Republican negotiators wanted the wage rollback to be in effect by the end of this next March. If true, this suggests that all the Republicans really wanted to accomplish with this little exercise was the creation for their own political cover (by saying “well, we tried”) for any fall-out from the carnage that could ensue if both GM and Chrysler were forced into Chapter 11 .
Labor and management work out these deals all the time, it makes no sense for the Senate to get involved unless they know a whole lot more about manufacturing cars than I’ve seen in their statements.
This was a political hit job. The Republicans had no intention of dealing with the problem, they just wanted to produce a few campaign ads. Shelby of Alabama better have a good story ready when he finds out that the SUV lines for BMW and Mercedes in Alabama are shutting down. The state gave both companies millions to set up those lines in Alabama, and they aren’t going to get anything for their money when everyone shifts to high efficiency cars.
It would be nice if people realized the “Class War” has just started in earnest.
The Party of Hoover would rather have 4 million people unemployed on the streets. I don’t know why, but that’s the truth. And Harry Reid is too gdmned spineless to force the Party of Hoover to make it official and actually, like, filibuster. I mean, it ain’t as if Congress is gonna be doing anything until December 31 anyhow, right?!
– Badtux the Disgusted Penguin
Corker’s three-pronged plan… himself, McConnell, and who’s the third?
From what I’ve read, it is exactly what you said: a hit job. The UAW made some serious concessions, but the R’s in the Senate never intended a successful deal. Haven’t they read enough history to understand that the nobility always ultimately loses a class war?
Addendum: oh, of course… Shelby. He’s the third prong.
The GOP is lining up their propaganda that all of these problems are a result of the Dems taking over Congress in 2006, so they don’t care how bad it gets. The facts don’t mean a thing, it’s all perception aided by the corporate media.