Union benefits already bailed out with taxpayer dollars in GM deal

A UAW-controlled auto retiree health care fund was owed $20 billion by GM before the bailout. Under the White House-dictated terms, UAW-appointed fund managers got back half of what they were owed in cash, whereas taxpayers who were owed $19.4 billion didn’t get a dime back in cash.

From IBD Editorials

The Obama administration last summer handed over $49.5 billion in taxpayers’ money to Big Labor-controlled, money-hemorrhaging General Motors. The White House pitched this costly taxpayer-funded bailout as a bid to save American jobs.

But in reality, GM’s reported U.S. employment shrank by nearly 25% just since last year’s bailout and is almost certain to continue falling.

More than 80% of U.S. automotive manufacturing jobs are now in union-free firms and these firms, not bailed-out GM and Chrysler, represent the future of domestic auto manufacturing employment.

Rather than workers, the greatest beneficiary of the GM bailout was the United Autoworkers union hierarchy. Along with sympathetic Obama agents, union officials were effectively left in charge of the company.

Given that the wasteful work rules that UAW bosses — wielding government-granted monopoly-bargaining power over employees — insisted on for decades were largely what drove GM into bankruptcy, they certainly didn’t deserve kid-gloves treatment. Yet that’s what they got.

A UAW-controlled auto retiree health care fund was owed $20 billion by GM before the bailout.

Under the White House-dictated terms, UAW-appointed fund managers got back half of what they were owed in cash, whereas taxpayers who were owed $19.4 billion didn’t get a dime back in cash.

Instead, the Obama administration “forgave” this entire loan on taxpayers’ behalf and earmarked an additional $23.5 billion for the company’s trip through bankruptcy. In exchange for the nearly $43 billion funneled to GM, taxpayers acquired a “60.8% equity stake” in GM.

Since GM has lost additional billions of dollars and seen a continued decline in its market share after it formally emerged from bankruptcy last year, it remains unclear how much (if any) of this “investment” taxpayers will get back.

Nevertheless, GM leaders and the UAW officials who colluded with them to extract $43 billion out of taxpayers in exchange for arguably worthless stock are now patting themselves on the back for paying back on April 21 the balance of a $6.7 billion loan they took out from taxpayers as part of the 2009 bankruptcy package.

In a weekly radio address to the nation late last month, President Obama suggested that the fact that taxpayers have now recouped 14% of the taxes he diverted into GM coffers on their behalf vindicates his decision to bail out GM and the UAW brass.

But ordinary Americans, with whom the GM and Chrysler bailouts have become overwhelmingly unpopular over the past year, are unlikely to agree. Especially not if they learn that GM was able to “pay back” the loan only because it had not yet spent all of the other $43 billion in taxpayer money it raked in last year.

FULL STORY

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[...] though unions have already gotten taxpayer bailouts of benefits ($20 BILLION in GM fiasco alone), preferential treatment in federally funded work, the overturning of 76 year rules on [...]

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