Ron Gettelfinger, President of UAW

The United Automobile Workers union has offered concessions to its contracts with the Big Three car companies in the hopes of saving the flailing industry.  The announcement by the UAW comes one day after the CEOs of GM, Ford and Chrysler went back to Capital Hill to beg, again, for bailout money from the Federal Government.

It is rare enough to see a union give up its hard fought contractual guarantees at all.  But seeing one do so in a concerted effort with the management of the respective companies it bargains with to get a lifeline from Washington goes to show just how bad off the American car business is right now.  However, it is not clear if Congress will actually move to hand over bailout money to the Detroit automakers given serious doubts amongst many legislators as to the wisdom of such a move.  Conservative Republicans on the hill are particularly opposed to handing out one thin dime to the car manufacturers, many saying that the place for relief for the industry should come in a restructuring in bankruptcy court.  A bankruptcy proceeding would put all cards on the table and give a Federal Judge the legal authority to invalidate contracts and reassign debts owed by the companies, while setting up a framework for rebuilding.  But the auto manufacturers fear that bankruptcy, and the negative connotations that go along with it, will cause irreparable harm in the minds of the general public to their already battered images.  The fear is not without merit, seeing how consumers depend on the reliability of an auto manufacturer for their car’s warranty, servicing and parts availability years down the road after the initial purchase of the vehicle. 

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LINKS:

CNNMoney: UAW Agrees to help automakers

NY Times: UAW makes concessions to help automakers

LA TImes: UAW gives ground to help Big 3’s chances for bailout