Friday, December 19, 2008 - Posts
-
sponsorship
Friday, December 19, 2008
Mo' Bailout:
1) The Treasury Department has now posted the terms of the bailout.
2) How does the UAW's Gettelfinger get away with saying these terms are "singling out workers"? The deal calls for creditors to convert two thirds of their debt into equity. There are also limits on executive compensation. Maybe they're mostly toothless in practice--but the terms directed at the UAW are explicitly toothless. They're just "targets."
3) It's not a deal: Note that Gettelfinger says he's unwilling to abide by these provisions and makes it clear he intends to "work with the Obama administration and the new Congress to ensure that these unfair conditions are removed." So it's not really a deal. It's a deal that one party has pledged to undo as quickly as possible. Think of the fuss if there were a Republican adminstration on the way and GM vowed to undo its obligations under the arangement as soon as possible.
4) We like it except for the parts that, you know, make our constituency change: Indeed, Barney Frank has joined in the call for removal of the UAW-sacrifice "targets" once Obama takes office. Is he actually amping up the pressure on the incoming President to protect the UAW, or is he just scoring cheap points with labor at a time when feelings are raw and he can't be expected to actually do anything? I smell Kabuki! They stick in non-binding targets. Labor and its allies rebel and righteously remove the non-binding targets. Everyone wins. Gettelfinger looks strong. Dems like Frank repay their debt to labor. Republicans get an anti-union cause. Nothing has happened. The real issue is whether Obama actually forces unionzed autoworkers to shave wages and (a much bigger issue) change restrictive work rules when the actual crunch date comes around next year.
5) Here are two paragraphs for my pro-union friends who doubt that Wagner Act work rules are a) at the core of Detroit's problem and b) the hardest thing to get the UAW to reform, because they require more than an incremental increase or decrease in compensation:
The Bush plan requires work rule parity between U.S. automakers and foreign automakers — not a simple task, said Aaron Bragman, an automotive industry analyst at consultancy IHS Global Insight.
“Work rule parity is very different between the UAW and the foreign automakers,” Bragman said. “Work rules govern how you make the cars, or who can touch what in the factory. There’s such a level of detail, and how a Japanese automaker makes cars is totally different to how a U.S. company makes cars. So there are a lot of difficult issues to be fixed very quickly. GM’s Rick Wagoner says they can fix them, but analysts are not so sure.” [E.A.]
As far as the UAW is concerned, this was not a change election! ... 11:24 P.M.
___________________________
Jobs Americans Won't Will Do: A WSJ report contradicts two pieces of pro-legalization CW:
1) 'Crops will rot in the fields without legalization and a "guest worker" program': Not this year--
Growers across the country are reporting that farmhands are plentiful; in fact, they are turning down potential field workers.
2) 'Non-immigrant Americans just won't do tough, dirty jobs like agricultural field work and day labor' Not any more--
In particular, Mr. Gray has observed an influx of U.S.-born Latinos and other workers who previously shunned field work. "These are domestic workers who appear to be displacing immigrants," says Mr. Gray.
A similar situation has emerged in U.S. cities from New York to Los Angeles, where unemployed, nonimmigrant laborers are seeking informal work that typically has been performed by low-skilled immigrants ...
Note that if Americans will do the work when they're desperate--i.e. when they can't get better jobs--that suggests that at least some of them will do the work if they're paid sufficient wages (i.e. when they can't get better jobs). The point is they will work on farms. We're just haggling over the price, and the alternatives. That means, when the economy picks up, that farmers could get much of the labor they need by ... raising wages. What a concept. ... [As long as we don't raise autoworker wages, eh?--ed The UAW's members negotiated above-market wages, demanded lots of legalistic work rules, and now want taxes on people like $10/hour agricultural laborers to bail them out when their firms go under (while deferring modest wage adjustments until 2011). Seems like a different case! But maybe your point is that restricting the flow of illegal immigrant labor can raise the wages at the bottom of the ladder, for the "least among us," while protecting the UAW protects the $50/hour "aristocracy" of the labor movement. That must be it. I wonder which course the Democratic party dogma prefers.] ... 10:29 P.M.
___________________________
-
sponsorship
Find That Lede! The lede in this story is ...
1) A man who was until recently a top aide to Gov. David Paterson, who will pick the next N.Y. senator, is very close to the Kennedys!
2) A top aide to Gov. Paterson didn't pay his taxes for five years!**
3) But at least the Kennedys didn't give this top aide to Gov. Paterson thousands of dollars! ... oh, wait!
As alert reader J emails: "What if Jesse Jackson Sr. and other relatives loaned money to Blago's ([until] very recently) top aide and now Jesse Jr. was trying to get Senate appointment? Wouldn't Patrick Fitzgerald be investigating?" ...
**--The aide resigned in late October, a few days after the story linked above. The initial version of this item erroneously suggested he still had his job. [4:34 P.M.] ... 4:20 P.M.
___________________________.
Obama in a manger ... and they say he's burdened himself with messianic expectations. ...[But Carla Bruni is there too. And Silvio Berlusconi--ed Where's Greg Packer?] 4:03 P.M.
___________________________.
I'm not sure that we know all the details of the Bush-negotiated auto bailout deal, but it certainly looks as if it's pretty much the same arrangement Congress was considering a couple of weeks ago, with the same flaws. [See fourth item here.] Basically, next March, if the auto companies are fudging on the plans that will make them "viable," Obama will have a choice--either 1) kill them (by forcing a bankruptcy in which they have to actually pay back the government's $17 billion, which they will already have spent) or 2) acquiesce in whatever insufficient semi-sacrifice they've come up with. Do you really think he's going to pick Option 1? It's too nuclear to have any credibility. ... That leaves open the possibility that the deal will produce what the "stakeholders" want it to produce--a bailout by the taxpayers that at least temporarily lets them avoid giving up the things (like the UAW's 22-pound contract) they'd have to give up in a normal bankruptcy proceeding.
Note how the NYT describes the "compromise" struck with the UAW:
[Senate] talks had deadlocked on a demand by Republicans that the wage cuts take effect by a set date in 2009, while the union had pressed for a deadline in 2011.
The plan announced on Friday offered a compromise between the positions, by making the requirements nonbinding and allowing the automakers to reach different arrangements with the union, provided that they explain how those alternative plans will keep them on a path toward financial viability. [E.A.]
That's one way to compromise between a 2009 deadline and a 2011 deadline--make all deadlines meaningless! I mean, "nonbinding." ... Or, rather, "targets." ... The only hopeful sign that the deal actually has some bite came from the UAW, which complained of "unfair conditions singling out workers" that weren't included in Congress's ill-fated proposal. But the union "didn't say what those conditions were." ...
Update: Presumably the union is referring to the non-binding "targets" outlined here.
The agreement calls for union wages and so-called work rules identical to those offered to the U.S. workers of foreign-based auto makers such as Toyota Motor Corp. The UAW has argued that, in accepting a two-tier wage structure as part of last year's labor deal, its wages already are consistent with Toyota's. Work rules -- which govern vacation time, break time, job classifications and the conditions under which a company can bring non-union contract workers into plans for non-automotive work -- remain a discrepancy between Detroit's auto makers and their non-unionized rivals.
For internal and external political kabuki reasons, it's in the interest of UAW leaders to complain--it shows their members that they are fighting for them, it suggests to the public that they are reluctantly doing their part--which creates grounds for skepticism about the severity of the "conditions." ... 1:09 P.M.
___________________________
Join the Fray: our reader discussion forum
What did you think of this article?