American Elephants

United Auto Workers Stunned by Devastating Defeat at Volkswagen. by The Elephant's Child

Workers at a Tennessee Volkswagen plant firmly rejected the United Auto Workers union’s bid to break into the right-to-work state on Friday.

The plant rejected the UAWs attempt to unionize the plant 712–626, in spite of an aggressive campaign by the union, and with the cooperation of Volkswagen. Union opponents, including Matt Patterson, executive director of the Center for Worker Freedom, celebrated.

The rejection of a key Democrat Party ally came in spite of President Barack Obama’s improper personal support for the unionization drive. “Tennessee Republicans “are more concerned about German shareholders than American workers,” Obama said shortly before the vote was announced.

Previous failed UAW campaigns at Nissan and Honda plants were resisted by employers, but Volkswagen did not resist the union here. The company has said it favors the creation of a German-style “works council,” which gives workers a voice on a variety of product and other decisions. Under American law, a union must represent employees for a company to form a works council.

In Germany, high-school students are separated into vocational training programs early on. and I suspect that workers’ relations with German unions are quite different than workers’ relations with the UAW here. The United Auto Workers were stunned by the devastating defeat. They had hoped that with Volkswagen’s cooperation, they could break into the foreign-owned Southern factories, in spite of a region wary of organized labor. More and more states are becoming “right-to-work”as the example of Detroit competes with the pitches of union organizers.

Union’s incessant efforts to boost pay and benefits for workers seem less enticing when measured against shuttered factories, lost jobs and lost benefits in the examples so prominent in the news. Tennessee auto workers seem to be quite happy with their employer.  It usually helps the union cause if workers hate their boss, and feel mistreated.

It would be interesting to know if President Obama’s constant efforts  to push  unions help or hurt his cause.  He has certainly been involved,  not the job of a president.


Taxpayers Will Lose Big on the GM Bailout. by The Elephant's Child

The long sorry saga of the General Motors bailout is coming to an end. General Motors is buying back 200 million shares of its stock from the government, or about 40% of the government’s holdings of GM stock. The remaining 300 million shares will be sold by March 2014.

By selling the stock and putting GM back in business, the federal governments’ “investment” was a great success, was it not?  Not. We were told repeatedly that the GM bailout would not only save jobs, but it might even end up netting the taxpayers a profit.

GM on Wednesday said it will buy back the 200 million share of the government stake for $5.5 billion, or $27.50 a share. Unfortunately the break even point on the government’s total holdings was $53 a share. Now, with $20.9 billion in taxpayer funds left to pay off from the remaining 300 million shares, the break-even point has risen to $69.72 a share.

Back in October, President Obama was bragging about the big comeback of General Motors.

When the American auto industry was on the brink of collapse, I said, let’s bet on America’s workers. And we got management and workers to come together, making cars better than ever, and now GM is No.1. again and the American auto industry has come roaring back.

That’s a valiant attempt to make a silk purse out of a sow’s ears, but it is a poke of exaggerations, half-truths and deceptions — yet it helped to secure Obama’s re-election.

In the 1950s GM owned roughly half of the market. By 2006, just before the financial crisis, its market share had fallen to about 24%. In March of this year, according to Ward’s Auto Reports, it hit an all-time low of 16.5 %. Not roaring back, and not exactly No. 1. The nonunion transplants like Hyundai and VW are growing much faster.

As for Obama’s bailout of American workers, it was a taxpayer giveaway to the United Auto Worker’s Union that allied with sloppy management bears the blame for the ills of the auto industry. The $80 billion auto bailout gave the UAW nearly $27 billion because GM could not shed its overly expensive labor contracts, something it could have done in a normal, legal bankruptcy. Obama bailed out the unions, not the auto industry

The UAW and its affiliates give tens of millions of dollars each election cycle, almost entirely to Democrats. Which explains why Obama’s auto czars arranged a government “bankruptcy” for GM flew in the face of hundreds of years of bankruptcy law and violated investor rights. Bondholders took huge losses, while unions got a big chunk of ownership in GM stock to which they had no legal right.

UAW workers at GM kept their pensions as well, but nonunion workers at GM spin-off Delphi lost theirs. This is a Chicago style bailout in which corporate cronies of the Obama White House pocket taxpayer “subsidies” and “green investments”, give executives a raise, and then go belly up. That’s what happens when the spenders think of revenue as “government money” which they are free to distribute in any way that gathers in future votes.

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