Under the egregiously unjust Obama bankruptcy-takeover of Chrysler and GM, secured creditors got stiffed, and the UAW along with the federal government took virtually all the stock in the new, reorganized companies. Of course, since the UAW virtually owns Obama and Congress, having purchased them with millions in union dues poured into Democratic campaign coffers, this means that the UAW now virtually owns two of the three domestic auto companies.
The most obvious injustice is that the very union that did so much to destroy those companies was rewarded for its longstanding irresponsible demands by being given control of the successor companies, reorganized at the taxpayer (not union) cost of many tens of billions of dollars. It is as if (as I have said elsewhere) the court forced a rape victim to marry the rapist. But it is also unjust because, in giving his supporters what they demanded, Obama grossly violated – indeed, urinated upon – the rights of the secured debt holders, formerly established by a century of bankruptcy law.
He set the stage for many undesirable consequences. One of these is that the UAW now has both the motive and the power to target Ford. After all, since the union controls the other two car companies, why shouldn’t it pick up Ford as well? Why not complete its monopoly over the domestic auto industry?
The UAW has obviously set its sights on doing precisely that. In its most recent contract with Ford, the union abandoned its longstanding “principal of parity.” Up until now, the UAW would put the same provisions in its negotiated contracts with all three auto makers. But now Ford is being hammered. For example, the new contract with Ford doesn’t include the cuts to retiree benefits that the UAW conceded to Chrysler and GM. Ford is stuck with more expenses, hence is at a competitive disadvantage.
So, under the new deal, preference is clearly given to the companies that the unions and government own over the one they don’t. How very convenient.
This, in my view, is yet another reason why Americans should boycott Chrysler and GM, until those firms are once again in private hands.
