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UAW Has Reason to Celebrate This Labor Day

Written by Julia A. Seymour

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Networks downplay union criticism while Obama's control of auto companies pays off for labor.

Business & Media Institute

The Labor Day holiday is almost upon us and the networks are likely to spend it talking about vacation, barbequing and holiday sales instead of examining the 2009 victories of the labor unions. In fact, all year they avoided talking about the many recent blessings organized labor has enjoyed.

The United Auto Workers (UAW), which donated more than 99 percent of its $25.4 million to Democratic federal candidates in the past 20 years, had a particularly good year, at least compared to other stakeholders as General Motors and Chrysler struggled and were forced into a government-managed bankruptcy by the White House.

Those auto company bailouts and bankruptcies were major stories this year, yet the network news media rarely discussed union causes of the car companies' inability to compete, and the high cost of union labor compared to non-union labor. In fact, in some cases the UAW was portrayed to evoke sympathy from viewers.

NBC's Lester Holt said that the UAW had "made major concessions," on May 29 which would save GM $1.3 billion a year. CBS described it as "swallowing a bitter pill." That's a surprising choice of words since, when all was said and done, the UAW's health fund ended up with 17.5 percent of GM shares and 55 percent of Chrysler shares.

What were those "major concessions?" Hans Bader at the Competitive Enterprise Institute cited the Washington Post, which described them as "'painful' only by the peculiar standards of Big Three labor:"

"UAW workers gave up their customary paid holiday on Easter Monday and their right to overtime pay after less than 40 hours per week. They still get health benefits that are far better than those received by many American families upon whose tax money GM jobs now depend. Ditto for UAW hourly wages, though according to the task force, GM's labor costs are now within 'shooting distance' of those at nonunion plants run by Honda, Toyota and other foreign firms. Cumbersome UAW work rules have only been tweaked."

The Heritage Foundation has said that hourly workers at Big Three auto companies cost over $70 in wages and current and future benefits.

Bader concluded that the UAW hadn't sacrificed its "privileged position" at all.

Yet the networks were sympathetic to the union label. ABC's "20/20" ran a lengthy segment July 10 on the history of GM and defended the UAW against the charge that "the union is part of the problem."

After Bill Weir mentioned the claim that the union is responsible for the auto companies' woes he brought on two people to refute it including UAW shop steward Brian Fredline who said:

"Back in the days when the UAW had those fat labor contracts, the Big Three were making billions of dollars. So, their employees profited by that money. But now that things have turned around, the UAW has been proactive and cost cutting. We've given up our jobs bank, we've cut our wages, we've cut our performance bonuses, we've cut our overtime, we've given up our cost of living."

NBC also found someone other than the unions to blame on April 30. Phil LeBeau repeated White House claims that hedge funds pushed Chrysler into bankruptcy "by refusing to exchange their debt for cash."

LeBeau didn't include a rebuttal from those Indiana bondholders who had loaned money to Chrysler.

Stealing GM and Chrysler for the Unions

After spending tax dollars to prevent GM and Chrysler from going under, the Obama administration forced those companies into bankruptcy anyway, and one big winner was the UAW.

Bankruptcy law exists to liquidate assets of a failed company or to negotiate debts in the case of a struggling, but viable company.

But in the case of GM and Chrysler, the government stepped in and orchestrated the bankruptcy process (after spending $50 billion), declaring winners and losers.

The Heritage Foundation president Edwin Feulner described the unusual bankruptcy as "crafted" by the Obama administration. Andrew Grossman, Heritage's Senior Legal Policy Analyst, testified to the House Judiciary Committee that the White House "is abusing bankruptcy law to benefit a favored constituency, the United Auto Workers union."

Yet, the news networks basically ignored claims that the managed bankruptcy could be illegal or unconstitutional.

However, Investor's Business Daily described this as a new era: "one where government, not investors and consumers, is the final arbiter of success."

IBD explained that in the case of GM's bankruptcy "the government, with roughly two times what private bondholders have on the table, gets a stake five times bigger. And the union, with about a third as much 'invested,' gets a 70% bigger stake. Even the Canadian government, with its $9.5 billion "invested," ends up with 12%."

"They call it 'restructuring.' We call it theft," IBD concluded.

The UAW also received a majority stake (55 percent) of Chrysler after its bankruptcy.

Chrysler bondholders released their own statement attacking that deal, saying, "We believe the offer to be a blatant disregard of fairness for the bondholders who have funded this company and amounts to using taxpayer money to show political favoritism of one creditor over another."

Big Labor, Big Donors

The White House's decision to spend $50 billion rescuing the auto industry wasn't a surprise. After all, liberals like Big Labor and vice versa.

"In the last 20 years, the U.A.W. has donated more than $25.4 million to federal candidates, 99 percent of it to Democrats, according to OpenSecrets.org, a site that tracks campaign contributions," The New York Times reported on April 29.

That Times article pointed out that UAW "stands to become one of the industry's few winners" in the wake of bankruptcy. However, the network news didn't emphasize that point.

The UAW was a strong supporter of Obama during the campaign. The union's Web site included an article touting Obama's record and advertising his 93 percent rating on key UAW issues. According to Forbes, UAW spent nearly $5 million to get Obama elected and the president is supportive of another of their pet issues: the Employee Free Choice Act (EFCA) or "card check."

According to The Heritage Foundation, EFCA would take away workers' rights to a secret ballot and put government bureaucrats in control of the workplace.

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