This weekend's edition of the Wall Street Journal contained an abstract of Wonderboy's 'car czar, Steve Rattner's, new book about the bailout of GM and the rape of US bondholders.
I won't bother supplying the book's title, for reasons I'll explain shortly.
Though the Journal article is a full two pages, I could only stomach about half of it. Rattner nearly breaks his arm patting himself and other administration flunkies, Rahm Emanuel and Wonderboy on their collective backs for their needless and mistaken "overhaul" of this sector.
What was really nauseating for me was Rattner's presumption that the federal government could and should have been meddling in industrial policy and the choosing of winners and losers in the GM and Chrsyler debacles.
On the way through, Rattner selectively quotes people like Wonderboy and Emanuel to the effect that they really, really thought about letting GM and the UAW founder and lose their investments or assets. Of course, we don't know if the quotes are true, and the article notes that Emanuel's representative has actually denied them.
But the overall picture painted of Wonderboy's transition team auto follies both sickens and scares me. Rattner admits that his boss' own selectively-enforced ethics rules prevented the auto team from actually hiring anyone with significant, relevant auto sector experience. Still, they plunged ahead, violating standing contracts of bondholders and arbitrarily rewarding UAW members with other peoples' assets.
This is one book I won't ever be buying. I'd rather not enrich Rattner in that manner. However, the excerpt alone is enough to justify being scared of every economic move this deeply flawed and inept administration makes.
Showing posts with label UAW. Show all posts
Showing posts with label UAW. Show all posts
Monday, September 13, 2010
Thursday, April 2, 2009
The UAW's Potential Loss At GM
Yesterday's Wall Street Journal ran an article focused on UAW head Ron Gettelfinger's dilemma regarding GM.
In particular, the piece's author, Kris Maher, noted,
"Accepting more concessions could also hurt the union's ability to grow at healthy companies. The UAW has been unable to organize U.S. workers at plants run by foreign auto makers. Accepting more cuts to GM wages and benefits would make organizing elsewhere even more difficult because the union would have little of value to offer nonunion workers, says John Russo, co-director of the Center for Working-Class Studies at Youngstown State University."
This is a rather nuanced but important point. Especially with card check legislation on tap in Congress.
With little to show for decades of representing auto workers, now that the flagship US unionized car maker is essentially dead, Gettelfinger has, indeed, run out of good options.
Outside of bankruptcy, as Holman Jenkins noted in the same issue of the Journal, bondholders can hang tough, betting on Wonderboy's hesitancy to let a court strip the UAW of benefits which the Democratic Party is expected to guarantee.
In bankruptcy, of course, Gettelfinger's union loses its last vestige of pretense at providing anything for workers.
Tough choices, indeed. Maybe Ron should have retired last year.
In particular, the piece's author, Kris Maher, noted,
"Accepting more concessions could also hurt the union's ability to grow at healthy companies. The UAW has been unable to organize U.S. workers at plants run by foreign auto makers. Accepting more cuts to GM wages and benefits would make organizing elsewhere even more difficult because the union would have little of value to offer nonunion workers, says John Russo, co-director of the Center for Working-Class Studies at Youngstown State University."
This is a rather nuanced but important point. Especially with card check legislation on tap in Congress.
With little to show for decades of representing auto workers, now that the flagship US unionized car maker is essentially dead, Gettelfinger has, indeed, run out of good options.
Outside of bankruptcy, as Holman Jenkins noted in the same issue of the Journal, bondholders can hang tough, betting on Wonderboy's hesitancy to let a court strip the UAW of benefits which the Democratic Party is expected to guarantee.
In bankruptcy, of course, Gettelfinger's union loses its last vestige of pretense at providing anything for workers.
Tough choices, indeed. Maybe Ron should have retired last year.
Monday, December 22, 2008
Bush Disappoints
Well, I was wrong. This recent post was prematurely optimistic.
According to Bush's remarks at 9am on Friday, he was influenced by his own advisers, who felt that GM CEO Rick Wagoner would spitefully push his own company into Chapter 7 liquidation, rather than Chapter 11 reorganization, if he was not lent the billions he wanted.
Bush blinked. There's not way around it. Between his honest desire not to hand his successor an in-liquidation auto sector, and his desire to foster a better legacy, he let his advisers talk him off of his innate conservative principles.
To me, this simply illustrates even more clearly what a contemptuous person Rick Wagoner is. His threat to destroy his own company, in order to cover up his mismanagement, is too egregious to describe.
But, that said, George Bush faltered and took the threat seriously. Sure, he limited the amount of the loan, and made it clear that he would leave any further assistance to the next president.
However, he missed the chance to force GM and Chrysler into a merger via Chapter 11, of their own volition.
The good news, though, is that Senate Republicans hung tough, and will be able to continue burnishing their conservative credentials in the months ahead.
According to Bush's remarks at 9am on Friday, he was influenced by his own advisers, who felt that GM CEO Rick Wagoner would spitefully push his own company into Chapter 7 liquidation, rather than Chapter 11 reorganization, if he was not lent the billions he wanted.
Bush blinked. There's not way around it. Between his honest desire not to hand his successor an in-liquidation auto sector, and his desire to foster a better legacy, he let his advisers talk him off of his innate conservative principles.
To me, this simply illustrates even more clearly what a contemptuous person Rick Wagoner is. His threat to destroy his own company, in order to cover up his mismanagement, is too egregious to describe.
But, that said, George Bush faltered and took the threat seriously. Sure, he limited the amount of the loan, and made it clear that he would leave any further assistance to the next president.
However, he missed the chance to force GM and Chrysler into a merger via Chapter 11, of their own volition.
The good news, though, is that Senate Republicans hung tough, and will be able to continue burnishing their conservative credentials in the months ahead.
Friday, December 19, 2008
President Bush On Detroit Bailout: Thank God for Small Favors
We can thank God for small favors.
In two interviews this week, President Bush has enumerated several concerns about whether or not to release TARP funds as loans to GM or Chrysler.
Far from rushing to release the funds, the President said he doesn't want to 'throw good money after bad,' and prefers an 'orderly bankruptcy' to a total, immediate liquidation.
Maybe we're not seeing him cave in to the UAW's Gettelfinger just yet, as Paul Ingrassia wrote on Monday in the Wall Street Journal.
Bush went further, stating that he is trying to minimize the size of problems left to his successor, and is putting himself in that position, to consider what would be best to do from that perspective.
He also went on record as requiring the UAW to give on some contract aspects in order to make any loan worthwhile, rather than useless in the long term.
Maybe there's still hope that GM will be pushed into a normal Chapter 11 filing after all.
We may know later this morning.
In two interviews this week, President Bush has enumerated several concerns about whether or not to release TARP funds as loans to GM or Chrysler.
Far from rushing to release the funds, the President said he doesn't want to 'throw good money after bad,' and prefers an 'orderly bankruptcy' to a total, immediate liquidation.
Maybe we're not seeing him cave in to the UAW's Gettelfinger just yet, as Paul Ingrassia wrote on Monday in the Wall Street Journal.
Bush went further, stating that he is trying to minimize the size of problems left to his successor, and is putting himself in that position, to consider what would be best to do from that perspective.
He also went on record as requiring the UAW to give on some contract aspects in order to make any loan worthwhile, rather than useless in the long term.
Maybe there's still hope that GM will be pushed into a normal Chapter 11 filing after all.
We may know later this morning.
Thursday, December 4, 2008
The Politics of The Auto Maker Bailout
The politics of the multi-billion dollar bailout that US auto maker CEOs Wagoner, Mulally and Nardelli are requesting on their return visit to Capitol Hill today are getting quite interesting.
This morning's festivities began with doddering Chris Dodd's (D-CT) inaccurate, myopic and generally stupid opening remarks. I know that Dodd is a grafter and totally corrupt, since he took special favors in the form of sweetheart loans from now-defunct Countrywide Finance. He was a 'friend of Angelo,' calling each day to shepherd his and his wife's special loan through processing, then claiming to never have known about the special deal he received.
Mind you, he chaired the panel that regulated this failed institution.
It remains to be seen what kind of graft Comrade Chris expects from the US auto makers. Maybe a free Volt from GM, or hybrid Eclipse from Ford? How about a special share of Cerebrus' profits if he directs a fire hose of cash toward Chrysler?
But until this morning, I don't think I fully realized how dumb Dodd is. He actually began his remarks by attempting to portray Bernanke's and Paulson's rescue of the US banking system as favoritism. Announcing that he had invited both financial mavens to testify this morning, Dodd actually thinks everyone else is as stupid as he is about what Paulson and Bernanke would have to say about the auto maker case.
The answer is, nothing. Ah, that would be Commerce Secretary Carlos M. Gutierrez, Chris. Do you have his phone number? I thought not.
In any case, Dodd went on to excoriate the Fed and Treasury over saving the nation's banking system, which is a hybrid of the Federal government and various chartered, heavily regulated national banks, while not jumping in to rescue a totally different type of company- industrial firms engaged in the manufacture of cars and trucks.
It's almost comical to see Dodd struggle to force his completely incorrect views on a sceptical nation. If he really can't understand why the nation's banking system is a qualitatively different case than a few already-failed vehicle producers, he needs to find another line of 'work.'
Immediately after doddering Dodd's remarks, Republican Senator Richard Shelby of Alabama provided a stunning contrast with his introductory comments. Shelby noted that the auto makers had already been failing prior to the financial crisis of this year, and, even now, are touting excessively optimistic sales and profit targets. Shelby observed that they have no Plan B if those plans are wrong, other than to return to Washington for more money.
However, this isn't the entire story on the auto maker's desired bailout. I've alluded to this in these posts here and here. In the former linked post, written in mid-November, within a day of the last visit of the auto makers' CEOs to the Hill, I noted,
""It's official. The Democratic Congress and its new partner, the inexperienced President-elect from Illinois, are going to ram a GM rescue bill through Congress ASAP.
This may be a record for the shortest time period in which a newly-elected President ran away from his most prominent campaign promises and morphed into someone else entirely.
"Trouble is, current President, George W. Bush, and the Congressional GOP members, aren't playing ball.
Boo Hoo!
Looks like GM is going to actually have to try to run its business until January 21st, 2009, without Federal aid. How shocking!Treasury Secretary Paulson has announced, long and loud, that the TARP will not be used to lend to GM for ordinary operations. President Bush isn't budging on the issue, either. No executive orders or special spending actions will be coming from him.
It seems, too, that most business press and a groundswell of ordinary American opinion is against selective aid to GM without a bankruptcy filing and, probably, the head of Rick Wagoner as the price for any Federal help."
Yes, that's the rub. Anything that Frisco Nan and Harry Reid pass can, and likely will be vetoed by the President....that is, the current, sitting President. The one who currently sits in the Oval Office. Not the one doing all the photo ops from Chicago.
And today's Congressional Republicans are already smarter and more positively disposed than their brethren of just a few months ago.
Look for Eric Cantor and Paul Ryan to brace House Minority Leader John Boehner, forcing him to withhold support for any Democratic bailout of the Detroit auto makers which does not first require their filing Chapter 11. Look for Senate Minority Leader Mitch McConnell to do the same, while President Bush cites Republican Congressional preference for a bill that includes that requirement.
Bush, Boehner and McConnell, standing in front of the White House, will make an effective team as the President gives his full support to the Republican leaders' version of a bill to help auto workers, via a DIP loan to those auto makers which file for bankruptcy, while steadfastly refusing to engage in corporate welfare and government picking winners and losers in the free market.
Citing the banking system as a vital national interest which had to be protected, Bush will draw a distinction between prior aid to the financial sector, and the Democrats' attempt to ladle out billions to failed US companies.
That veto is key. The Illinois rookie, regardless of what he has the press believing, is powerless until 12:01PM on January 20, 2009. Until that moment, anything Congress passes must be signed by President Bush.
GM's Wagoner has shot himself in the foot by insisting that, without Federal aid, his company will go bankrupt by the end of this month.
If that is not an invitation for the Republicans to push him into Chapter 11 to get access to a DIP loan, what is?
Moreover, public sentiment is broadly against a straight bailout of Detroit, sans bankruptcy filings.
This is one case in which American-style government comes to our rescue. Between 47 and 48 states don't rely on unionized labor working in GM, Ford or Chrysler factories to sustain their economies. This mass of American voters and workers realize that they are being asked to pay tax dollars to fund UAW benefits for current and retired workers which far exceed what they, themselves, enjoy.
That's why Frisco Nan, Harry Reid and even the New Messiah from Illinois have seriously miscalculated this issue. Americans are against a non-bankruptcy bailout of GM, Ford or Chrysler.
I believe that, if somehow, a bailout is effected without the bankruptcy requirement, you could see the President-elect's honeymoon cut to only a few months, and the Democrats lose either or both the House and Senate in 2010.
This is becoming a highly visible issue. And one on which most Americans' gut instincts are correct- that UAW members do not deserve a bailout, via GM, Ford and Chrysler, in order to preserve benefits that few others in the country enjoy.
This morning's festivities began with doddering Chris Dodd's (D-CT) inaccurate, myopic and generally stupid opening remarks. I know that Dodd is a grafter and totally corrupt, since he took special favors in the form of sweetheart loans from now-defunct Countrywide Finance. He was a 'friend of Angelo,' calling each day to shepherd his and his wife's special loan through processing, then claiming to never have known about the special deal he received.
Mind you, he chaired the panel that regulated this failed institution.
It remains to be seen what kind of graft Comrade Chris expects from the US auto makers. Maybe a free Volt from GM, or hybrid Eclipse from Ford? How about a special share of Cerebrus' profits if he directs a fire hose of cash toward Chrysler?
But until this morning, I don't think I fully realized how dumb Dodd is. He actually began his remarks by attempting to portray Bernanke's and Paulson's rescue of the US banking system as favoritism. Announcing that he had invited both financial mavens to testify this morning, Dodd actually thinks everyone else is as stupid as he is about what Paulson and Bernanke would have to say about the auto maker case.
The answer is, nothing. Ah, that would be Commerce Secretary Carlos M. Gutierrez, Chris. Do you have his phone number? I thought not.
In any case, Dodd went on to excoriate the Fed and Treasury over saving the nation's banking system, which is a hybrid of the Federal government and various chartered, heavily regulated national banks, while not jumping in to rescue a totally different type of company- industrial firms engaged in the manufacture of cars and trucks.
It's almost comical to see Dodd struggle to force his completely incorrect views on a sceptical nation. If he really can't understand why the nation's banking system is a qualitatively different case than a few already-failed vehicle producers, he needs to find another line of 'work.'
Immediately after doddering Dodd's remarks, Republican Senator Richard Shelby of Alabama provided a stunning contrast with his introductory comments. Shelby noted that the auto makers had already been failing prior to the financial crisis of this year, and, even now, are touting excessively optimistic sales and profit targets. Shelby observed that they have no Plan B if those plans are wrong, other than to return to Washington for more money.
However, this isn't the entire story on the auto maker's desired bailout. I've alluded to this in these posts here and here. In the former linked post, written in mid-November, within a day of the last visit of the auto makers' CEOs to the Hill, I noted,
""It's official. The Democratic Congress and its new partner, the inexperienced President-elect from Illinois, are going to ram a GM rescue bill through Congress ASAP.
This may be a record for the shortest time period in which a newly-elected President ran away from his most prominent campaign promises and morphed into someone else entirely.
"Trouble is, current President, George W. Bush, and the Congressional GOP members, aren't playing ball.
Boo Hoo!
Looks like GM is going to actually have to try to run its business until January 21st, 2009, without Federal aid. How shocking!Treasury Secretary Paulson has announced, long and loud, that the TARP will not be used to lend to GM for ordinary operations. President Bush isn't budging on the issue, either. No executive orders or special spending actions will be coming from him.
It seems, too, that most business press and a groundswell of ordinary American opinion is against selective aid to GM without a bankruptcy filing and, probably, the head of Rick Wagoner as the price for any Federal help."
Yes, that's the rub. Anything that Frisco Nan and Harry Reid pass can, and likely will be vetoed by the President....that is, the current, sitting President. The one who currently sits in the Oval Office. Not the one doing all the photo ops from Chicago.
And today's Congressional Republicans are already smarter and more positively disposed than their brethren of just a few months ago.
Look for Eric Cantor and Paul Ryan to brace House Minority Leader John Boehner, forcing him to withhold support for any Democratic bailout of the Detroit auto makers which does not first require their filing Chapter 11. Look for Senate Minority Leader Mitch McConnell to do the same, while President Bush cites Republican Congressional preference for a bill that includes that requirement.
Bush, Boehner and McConnell, standing in front of the White House, will make an effective team as the President gives his full support to the Republican leaders' version of a bill to help auto workers, via a DIP loan to those auto makers which file for bankruptcy, while steadfastly refusing to engage in corporate welfare and government picking winners and losers in the free market.
Citing the banking system as a vital national interest which had to be protected, Bush will draw a distinction between prior aid to the financial sector, and the Democrats' attempt to ladle out billions to failed US companies.
That veto is key. The Illinois rookie, regardless of what he has the press believing, is powerless until 12:01PM on January 20, 2009. Until that moment, anything Congress passes must be signed by President Bush.
GM's Wagoner has shot himself in the foot by insisting that, without Federal aid, his company will go bankrupt by the end of this month.
If that is not an invitation for the Republicans to push him into Chapter 11 to get access to a DIP loan, what is?
Moreover, public sentiment is broadly against a straight bailout of Detroit, sans bankruptcy filings.
This is one case in which American-style government comes to our rescue. Between 47 and 48 states don't rely on unionized labor working in GM, Ford or Chrysler factories to sustain their economies. This mass of American voters and workers realize that they are being asked to pay tax dollars to fund UAW benefits for current and retired workers which far exceed what they, themselves, enjoy.
That's why Frisco Nan, Harry Reid and even the New Messiah from Illinois have seriously miscalculated this issue. Americans are against a non-bankruptcy bailout of GM, Ford or Chrysler.
I believe that, if somehow, a bailout is effected without the bankruptcy requirement, you could see the President-elect's honeymoon cut to only a few months, and the Democrats lose either or both the House and Senate in 2010.
This is becoming a highly visible issue. And one on which most Americans' gut instincts are correct- that UAW members do not deserve a bailout, via GM, Ford and Chrysler, in order to preserve benefits that few others in the country enjoy.
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