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Got Your $5,000 Bonus Yet?



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One of the scandals of the Great Recession is that as Americans struggled to keep their heads above water, their tax dollars were propping up fat public-employee-union benefits even as state budgets went underwater. In Michigan in 2009, for example, average compensation per employee (including benefits) was down 2.0 percent for private sector employees — but state government employees saw their pay increase 3.6 percent.

Now comes word that taxpayer-supported auto unions — among the highest paid manufacturing workers in the nation — will get thousands of dollars in bonuses while taxpayers are expected to lose $15 billion on their Detroit investments.

Welcome to UAW Bailout 2: The Hangover.

While GM — the lead company in the first contract negotiations since the Detroit automaker (and Chrysler) emerged from bankruptcy in 2009 — has insisted on profit-sharing formulas rather than giving back union pay concessions gained in bankruptcy (pay cuts which brought the UAW to pay parity with its Japanese competition), there is this obtuse language in the agreement:

“General Motors Co. will give its hourly workers a $5,000 signing bonus,” reports the Detroit News.

A signing bonus? You mean like some financial firms offer to lure away top workers from the competition? Like millionaire athletes get to sign with a new team?

No, a signing bonus for every blue collar worker for simply agreeing to the new contract. We’re not making this up.

As Mickey Kaus puts it: “I’m sure there are sophisticated arguments for why the UAW members shouldn’t pay back the taxpayers who bailed their employer out of bankruptcy before they negotiate a deal that gives them each a $5,000 bonus. I just can’t think of them right now.”

When was the last time the average American taxpayer got a $5,000 bonus for showing up to work? Having bailed out GM and its union with $50 billion while their own income dropped by 3.2 percent since January 2009, these same taxpayers are now on the hook for $243 million in signing bonuses for GM’s 48,500 workers.

Taxpayers — GM stockholders — are being had. While GM promised to return to competitiveness, it is, in fact, still uncompetitive with the fastest-growing automaker in North America: Hyundai. The Korean maker, says the Center for Automotive Research, pays its non-union Georgia workers $40 per hour, which allows it to make cars more cheaply than GM’s $58-per-hour workers — thus gaining footholds in the market. Another non-union transplant — VW — is pursuing a similar strategy.

Why isn’t GM doing the same? Because it has a union — and because you, dear taxpayer, will bail them out if they fail.



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