This isn't really politics per se since members of the two political parties are represented on both sides of the issue. What it is, is bad business. The big three have been appeasing the UAW for a long time now and in the process, mortgaging their future business viability. In the back of their little, short sighted, immediate gain minds, the execs at the big three always knew that the day would come when the market would no longer bear the burden. Well that day is here and it's time to pay the piper.
I understand that the UAW came about for some very good reasons. But it's also true that an unchecked UAW has now become as oppressive as that which they fought against in their beginning. Business only works when management and labor work as partners, and not as adversaries. Management has to be sensitive to employee needs, and unions must be careful not to kill the goose that lays the golden eggs. Well, the goose is dead in Detroit. The UAW is now responsible for $3000.00 of every new car produced by the big three (especially GM).
Now here's where politics comes into play: The UAW has been really pushing for the bailout money because the auto makers would be under government mandate and control (like the federal gov't knows anything about running a business?!?). There was little in the proposed bail out deals that would have forced the UAW into any serious re-negotiation of contracts with the automakers. Both houses of Congress and the incoming administration are pro-union, so the UAW knows it wouldn't have had to seriously re-negotiate their deals with the automakers. All that would have resulted from this band aid fix is that the big three would have gotten a temporary stay of execution. The underlying problems weren't fixed, and it would be simply throwing good money (ours, the taxpayers) after bad.
Bankruptcy is another story. An impartial bankruptcy judge would expect concessions from both sides. Some shared pain as is appropriate under the circumstances. Not only would the UAW be compelled to enter into binding negotions with the auto makers, the bankrupty judge could order them into the negotiations - and hold both parties accountable for the terms of any agreements reached during the long process of coming out of bankruptcy. It's worked for the airlines, why should the auto industry be treated as a special case?
Remember names like Desoto, Packard, Studebaker, Nash, Hudson, AMC, Willys? They all went out of business because they couldn't compete against what became the big three (although Nash and Hudson did get a breif reprieve when they formed AMC). Now it's the big three's turn. What were once small upstarts have out competed the big three in the game they used to dominate. Survival of the fittest, capitalist Darwinism, evolution of the species so to speak.
And so goes the business cycle....
