UAW Negotiating with Itself
Mickey Kaus noted the other day that the UAW, which owns large stakes in both GM and Chrysler without paying a cent thanks to their support for the election of President Obama, is cutting their own companies a break and sticking it to Ford.
I knew they’d find a way to punish Ford: The new UAW contract with Ford apparently does not give America’s surviving non-bankrupt automaker parity with GM and Chrysler, reports Bloomberg: “The plan doesn’t include cuts to retiree benefits, such as vision coverage, that were granted to GM and Chrysler.” Rather, the pain seems even more concentrated on future hires (if there are any) than with the GM/Chrysler deals. … TTAC wonders whether the UAW had an extra incentive to resist giving concessions that might make Ford more successful now that the union owns a large chunk of its main domestic competitors. [emphases original]
Megan McArdle cries Foul!
It seem to me that this is a clear and insurmountable conflict of interest. Should the UAW be compelled to relinquish its stake in the automakers, or stop representing Ford workers? I’d say they should. Not that this has a snowball’s chance in hell of actually happening.
It is, to say the least, problematic for a labor union to own competing firms. But to the degree that the conflict of interest hurts Ford’s UAW employees, they could presumably divest and start a new union.
The real issue is the antecedent to this situation: The federal government picking winners and losers between firms. The federal taxpayer bailed out two of the Big 3 and now has powerful incentive to assure the success of those two companies at the expense of the third. Not only is Ford much less likely to get government contracts now but they’re much more likely to come under higher regulatory scrutiny. That they also have a more hostile union — one that no longer ultimately needs them to stay in business — is mere icing on the cake.