Posted by
Brett Stevens on Friday, May 08, 2009 1:13:37 PM
In one fell swoop, the Democratic Party has managed to pull off one of the biggest robberies in American history, right beneath our noses. GM, Ford, and Chrysler, going through a serious downturn in car sales and strangled by contractual commitments, needed help. First they flew into Washington D.C. to beg for a bailout from the federal government. They were sent home red-faced after a public scolding by the debutantes in Congress because of the corporate jets. Then, congressional Democrats summoned them to Congress, hat in hand, to grovel before committee for money. Ford, perhaps realizing the position they’d put themselves in, didn’t take the money. But, GM and Chrysler both did. Then they asked for more. The whole time this was happening, their stock prices were plummeting leaving investors and creditors with nothing to show for their efforts. This was precisely the kind of crisis Rahm Emmanuel had in mind when he said it provided opportunity for change. They took that opportunity and this is what it accomplished.
Though the best thing that could have happened was for the Big Three to go through bankruptcy to fix their contractual problems, they didn’t want to do that. The Obama administration smelled blood in the water. They provided bailout money to GM and Chrysler bathed in glue and strings that the administration could use to manipulate the crisis. First, Democrats began ordering changes in their practices. Then, they ordered a plan be laid. Finally, they managed a ‘quick’ bankruptcy scheme to their liking. Since they held the cards, they could make the rules. So, even though the American taxpayers will ultimately pay the cost, the winners are not us.
The bankruptcy scheme for Chrysler gives the United Auto Workers with a 55% share in the company with a much lower share for the government. Fiat is buying a 20% share and will likely share its technology to create supposedly ‘green’ cars and other vehicles. But, why would the administration hand over a majority share to the union? Why would the American government keep the control since we are the ones ponying up the money? There is, of course, an explanation. The negotiators are arguing that this stake given to the union, not the workers, the union, is for part of the pension fund. Huh? If a company’s broke, all the contractual obligations are under scrutiny. There should be losses throughout the stakeholders in this company. But, that wouldn’t facilitate the change the Obama administration wants. This deal would.
This deal allows for three important things. First, it robs the investors and creditors of Chrysler and hands it over to the union. Second, it robs the American people of treasure and hands that over to the union. Finally, the Democrats will have a steady fund straight out of the Chrysler profits via the UAW. This is a dramatic shift in American business practices and power. It will give the union a giant slush fund in which to both call and finance the Democratic Party. In essence, buying a Chrysler vehicle is a contribution to the Democratic Party. Simple.
This Obama deal takes the means of production out of the bourgeois private sector and hands it to the proletarian union. Now, think about this, there is nothing wrong with workers having a stake in a company. For all of our economic history, workers have been awarded a stake in their employing enterprise. But, this is not a stake by the employees. This is a stake held by the union and the union leaders. The shares will be held in common and administered by these union officials. Therefore, the proceeds of the company will be administered and directed by these officials, not by the rank and file. That is a sea change. It will mean these unionists will run the company and decide where the money will go. Where does the money go when unions are involved? It goes to Democrats.
Obama managed to affect this change almost without challenge. Chrysler is the first example of Obama’s socialistic tendencies and he’s doing it with the cooperation of the private sector. They are trusting that this deal will become profitable when it is almost surely bound to fail. Fail, unless the government exclusively buys its vehicles from Chrysler, which it is sure to do. Does Fiat really think this socialist administration and its unionist allies will allow it to employ the best business practices? They do, but it won’t happen. Orders for vehicle standards will pour out of the Transportation Department, Energy Department, EPA, and the White House. They will be required to build cars that defy the laws of physics and when that doesn’t happen, they will renege on the deal and thrust Fiat out. Obama, as he so loves to say, won. He pulled a hat trick that has rearranged wealth and placed it into the hands of his allies and this is only the beginning.