Are Auto Unions Ready To Be Responsible Owners?

Now that it’s getting majority control of Chrysler, will the United Auto Workers union be willing to enact the kind of genuine workplace reforms that will allow the giant automaker — in President Obama’s words — not only to “survive, but to thrive”?

We’ll see — because that would mean repealing the crippling excesses that helped bring the Detroit giant to bankruptcy.

Excesses like mandating overtime pay after just five or six hours of work a day. Or retirement pensions after 30 years on the job, regardless of age. Or health-care obligations that nearly tripled in cost in just a decade.

In short, now that the UAW is about to hold a 55 percent stake in Chrysler under the Chapter 11 bankruptcy-protection proceedings unveiled last week, is the union prepared to act like a responsible owner?

That’s the challenge before it.

To be sure, the bankruptcy announcement — including the majority share for the UAW — was likely unavoidable. And, as Obama said, it’s not a disaster — it’s precisely the kind of targeted bankruptcy we were urging rather than throwing billions in bailout funds at the troubled carmakers, as the Bush administration did.

Under the deal, Chrysler would emerge from Chapter 11 within 60 days and enter a partnership with Fiat, for which the Italian firm would get a 30 percent stake.

The newly restructured company, free of major long-term debt, will then be bolstered with yet more government aid: $8 billion from Washington, plus $2.6 billion from Canada — on top of the $4.5 billion it already has received.

If Chrysler can’t survive with that kind of funding, it probably deserves to go the way of Studebaker — the last major US automaker to go Chapter 11, back in 1933.

Ultimately, however, Chrysler’s viability depends on its ability to make cars that the public wants to buy at a price it can afford.

That’s where the union comes in. Detroit — and the nation — will be watching to see if the UAW looks out for its long-term interests, or whether it will be as short-sighted as usual.

Editorial
New York Post

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