Will UAW wreck car company rescue?


The greatest hurdle to the recovery of the auto industry may not be the credit crisis or high gas prices. It may be the UAW. If it decides not to play ball as part of a federal government bailout, the $25 billion being proposed in an aid package may not be enough, and Congress may decide to abandon the plan completely,

According to the FT, "The US United Auto Workers (UAW) union has ruled out concessions – at least for the time being – to help rescue the ailing Detroit-based car industry." Of course, the argument is deeply flawed and is the kind of logic that has helped bring the industry to its knees. Management blames labor. Labor blames management. Both blame the credit crisis. It is a neat circle which leads nowhere and does not do any of the parties any good.

Imagine being a member of Congress handing out billion of dollars that many taxpayers think should not go to an industry that has wounded itself and many economists say will not ultimately save the US car companies. If the parties who will get the benefit are fighting among themselves, the chance that a rescue can be successful is almost certain to be destroyed.

Detroit has shot itself in the foot. Now, it can move the gun to its head.

Douglas A. McIntyre is an editor at 24/7 Wall St.

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