Conflicts of interest
I knew they’d find a way to punish Ford: The new UAW contract with Ford apparently does not give America’s surviving non-bankrupt automaker parity with GM and Chrysler, reports Bloomberg: “The plan doesn’t include cuts to retiree benefits, such as vision coverage, that were granted to GM and Chrysler.” Rather, the pain seems even more concentrated on future hires (if there are any) than with the GM/Chrysler deals. … TTAC wonders whether the UAW had an extra incentive to resist giving concessions that might make Ford more successful now that the union owns a large chunk of its main domestic competitors. [emphases original]
Yes, now you have the UAW and the government as stakeholders in GM and Chrysler, while members of the UAW work for Ford. This certainly seems like an awkward situation. Writes Joyner:
It is, to say the least, problematic for a labor union to own competing firms. But to the degree that the conflict of interest hurts Ford’s UAW employees, they could presumably divest and start a new union.
The real issue is the antecedent to this situation: The federal government picking winners and losers between firms. The federal taxpayer bailed out two of the Big 3 and now has powerful incentive to assure the success of those two companies at the expense of the third. Not only is Ford much less likely to get government contracts now but they’re much more likely to come under higher regulatory scrutiny. That they also have a more hostile union — one that no longer ultimately needs them to stay in business — is mere icing on the cake.
Picking favorites is key here. This is what happens when the government intervenes in the markets to the advantage of specific corporations or special interests. Unlike a stimulus check cut for every American to spend as they please, this sort of bailout rewards failing companies and punishes the one US automaker that was actually not in trouble. Intentions aside, this seems pretty antithetical to capitalism and fairness and how we ought to be running our economy.
Now walk over to health care for a moment. We hear a lot about insurance companies – and sure, they’ll make out pretty good under the new legislation, since it doesn’t require them to really compete any more than they do today – but what about Big Pharma? And we know that the big unions are opposing any move to wrest health insurance from employers – even though liberals and conservatives alike think that’s the only way to really reform our muddled system. So we can rest assured that the unions will be winners, too. So let’s see, that’s Big Pharma, Big Insurance, and Big Labor in the Winners Column.
Who should we put in the Losers Column?