Over the last couple of days, the media has devoted considerable print and airtime to a proposed bailout of the so-called Big Three — the Detroit-based car giants GM, Ford, and Chrysler.
"Big Labor Three" is more like it.
What really separates the Detroit automakers from the "foreign" automakers (who also make hundreds of thousands of cars in the U.S.) is compulsory unionism. Foreign manufacturers like Toyota, Honda and Nissan have U.S. plants that are free from monopoly bargaining, and they produce cars largely in Right to Work states, where forced dues are prohibited.
Some of the bailout coverage has addressed the destructive effects of the United Auto Workers union’s monopoly bargaining privileges (who can forget the $31/hour paid to over 12,000 UAW members to do crossword puzzles?) which have run these once-great companies into the ground and costing tens of thousands of jobs.
While the proposal is, at a minimum, an indirect bailout of the UAW and forced unionism in general, it appears the union bosses have a direct bailout in mind as well. The Washington Post explains,
The $25 billion would come on top of $25 billion in low-interest loans Congress approved in September for the car companies to retool factories to produce more fuel-efficient vehicles. And the United Auto Workers plans to press next year for an additional $15 billion in public funds to cover the first payment the three companies are due to make into a new independent entity that will fund retiree pensions and health benefits.
After the UAW’s two-day strike against GM last year led to the creation of union-administered trusts to handle health and pension obligations to union retirees, CNN noted this amazing statistic:
Today, the number of UAW retirees and surviving spouses collecting benefits from the big three automakers – about 540,000 – outnumbers active members working at the three automakers by three to one.
If this sounds like a pyramid scheme, don’t be surprised to learn that this is exactly where the bailout money — tens of billions of taxpayer dollars — will be going. The Big Three simply won’t be able to afford payments to the union-boss-run trusts, and now they want all Americans to pay for them.
What has sadly gone unreported in this fiasco is the nature of union-administred trust funds. The National Right to Work Foundation has previously revealed the lack of accountability in union pensions, which have often been used by union bosses as slush funds. As we told you last month, despite new federal reporting requirements, union and trust fund officials can choose to hide any trust expenditures they wish from their members. Can we really expect the new administration to ensure that union trusts aren’t misusing their funds?
It seems unlikely that Americans will tolerate a bailout of the UAW bosses.
