The United Auto Workers and General Motors have come to a tentative agreement for a national labor contract covering the next four years. In addition to hourly raises for both veteran and second tier autoworkers, the contract calls for a $5,000 signing bonus. With 48,500 employees represented by the UAW, that means that GM will be paying out a little more than a quarter of a billion dollars in those bonuses.
While the UAW members, I’m sure, look at the bonus and raises as compensation for the concessions they’ve given to domestic automakers over the tumultuous past half decade, they do present a public relations problem for both the union and for General Motors. In the Daily Caller, Mickey Kaus asks the question, “How about paying back the $15 billion first?”, regarding US taxpayers’ “investment” in bailing out GM?
It’s one thing to give workers power to negotiate above-market wages through collective bargaining–hey, let them squeeze the bosses for all the bosses can bear. It’s another thing when they squeeze more than the bosses can bear, the bosses go broke, and ordinary citizens, many poorer than UAW members, have to make up the difference.
The proposed agreement also will yield autoworkers an increased share of GM’s current profitability, with larger profit sharing checks promised in the contract.
Kaus makes an important point. Just recently, internal emails in the Department of Energy have come to light that warned superiors and the administration about the bad “optics” the eventual bankruptcy of federal loan beneficiary Solyndra. I don’t think that the UAW could demand for, and GM would agree to, something with “optics” worse than paying out $248 million in bonuses to workers while the company and the UAW still owe taxpayers $15 billion. Remember, the UAW got an equity stake in GM as part of the bankruptcy restructuring.
Back in February, when GM announced that some of its executives and salaried workforce would be receiving bonuses and having some compensation restored that was eliminated during the meltdown, the UAW was vocal in its criticism. Some in the media, like the New York Times, were also critical of GM for rewarding managers with bonuses while the company still hadn’t paid back the bailout funds. So far, the NYT has not been equally critical of similar bonuses for union members.