White House Favoritism Toward UAW Brass Costly to Taxpayers

 

Auto Bailout or UAW Bailout? Taxpayer Losses Came from …

 

Obama did not save Detroit“Ž Washington Examiner

 

On the campaign trail, President Obama stubbornly continues to defend his Administration’s handling of the 2009 bankruptcies of United Autoworkers (UAW/AFL-CIO) union boss-controlled General Motors and Chrysler. But as a new study (see the first link above) coauthored by Heritage Foundation analyst James Sherk and George Mason University law professor Todd Zywicki reminds us, White House favoritism toward the UAW brass in the GM and Chrysler restructurings has been very costly to taxpayers. Moreover, it did nothing to prevent massive job losses. GM, for example, emerged from its taxpayer-supported restructuring with 30% fewer U.S. employees than it had before it went into bankruptcy.

Mr. Sherk and Dr. Zywicki conservatively estimate the two bailouts will cost taxpayers a net $23 billion once the government finally sells its remaining stake in GM. Had the Administration required the UAW elite to accept standard bankruptcy concessions, taxpayers arguably would have lost no money at all, and many additional jobs might have been saved.

As Washington Examiner editorialist Conn Carroll pointed out in a column yesterday (second link above) drawing on the Sherk-Zywicki study, President Obama’s unprecedented efforts to ensure that the very UAW union kingpins who played a major role in bringing down GM and Chrysler got better treatment than other creditors and taxpayers in the companies’ bankruptcies “violated every principle of federal bankruptcy law, undermined the rule of law, and cost taxpayers” billions of dollars.