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UAW's Reckless Driving

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By DCWD40
November 21, 2008

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UAW President Ron Gettelfinger is holding a press conference on CNBC right now and I totally disagree with his approach. Mr. Gettelfinger is looking to the past to whine about what has happened. Instead of looking forward, with a plan, he focuses on the tax incentives that Alabama has extended to get Mercedes, Honda and Hyundai factories built there.

Here is what bothers me:

1) Alabama is a State. The UAW, I thought, was looking for Federal help for the auto companies. The union's macro-focus is off base.

2) The UAW is focused on an estimated $253 million in income tax incentives given by Alabama to Mercedes. This happened in 1993. Yes, that's 15 years ago and the UAW is still talking about an incentive that stretched out for a decade or more. Isn't it ironic that some of these incentives ended five years ago and the UAW is still talking about them? [Note: The state also agreed to build and improve roadways and infrastructure and provide more than $100 million in employee training programs.] In summary, the union's macro-focus on time frame is stuck in the past and doesn't help with the future.

3) It doesn't seem to dawn on the UAW that we are talking about 100-times the dollars that Alabama approved for Mercedes and that there is a big risk this cash will not last very long. In GM's case, it might not last two years. The union's macro-lack-of-focus on spending is not helpful.

4) Alabama made its choice in good times and had to go to court to defend what it had done. The Feds, if they allocate this money, will see it spent quickly and there will be no court efforts to stop the action. The union isn't focused on the macro-money issue: Will this gigantic amount of money will be spent effectively?

What has bothered me throughout the Senate and House hearings is the total lack of a concrete plan. While Chrysler suggested a 1-for-3 approach to R&D spending (allowing one entity to develop technology that could be shared by the three), most of the conversation is about "how much is needed" and not about "how to get the most for the dollars to be spent."

As you would expect, the UAW is talking about "the people" as if the only people that mattered are auto workers and their trickle down impact. "We the people" deserve stewardship of our money so it does the most for as many people as possible!

Why didn't someone in Congress ask the UAW and the Big Three CEO's to bring a copy of the union contracts? It was very tiring to hear every contract issue be answered, "We'll have to look into that and get back to you."

Why didn't someone in Congress tell the CEO's that they wanted them to have an outline for when they would need money and how it would be spent? I found it comical that the Ford CEO said that they had recently completed a financing round (they did!) and really didn't need money immediately. The person from the Budget Office confirmed that Ford was in the best shape of the three. But, GM and Chrysler clearly needed money and had no plan. GM's CEO even went so far as to say they would get between $10 and $12 billion of the money. He didn't know what he was "getting" and acted like plus-or-minus $2 billion was part of the game. It's about time someone got serious about the money! This is "we the people's" money that is being so foolishly discussed.

It is too bad that many people would watch the UAW President talk and not go away frustrated with his lack of a plan to move forward. Looking back at history in order to learn is one thing. The situation that faces the Big Three today does not lend (pun not intended) itself to historical review. The banking system's lending, the lifeblood that auto companies live on, doesn't collapse every couple of years -- thank God! To be looking at Alabama and trying to make something of that is just plain foolish (no capital "F" needed here).

It is too bad people and the press aren't saying this: Mr. Wagoner, the CEO of GM, has a base pay package of $3.36 million annually. Has anyone heard a million dollar answer from him yet?

I see irony in the Wagoner name. I'm old enough to remember station wagons. They are gone. Maybe Mr. Wagon-er should be gone too.

Just a frustrated old guy's opinions...

W.D.