Tearing Up The Contracts

by digby

Atrios points out that "if the government was tearing up union contracts and slashing wages, the equivalent story would be told from a different perspective." In fact, it was. Explicitly:

Atlanta-based talk show host Neal Boortz told viewers on the Nov. 11 “CNN Newsroom” if the government were to bail out General Motors (NYSE:GM), then it should void the labor agreements some blame for getting the automakers in trouble in the first place.

“I did not say don’t bail them out,” Boortz said. “I did say, ‘Look – if you’re going to bail them out, void these union contracts. These union contracts are totally absurd and the benefits that they pay people that aren’t even working anymore, salaries that they pay people who aren’t working.”

There was a lot of that kind of talk going around, if you'll recall. I especially appreciated Tom Friedman's contribution in which he endorsed the idea of firing everyone in sight, "tearing up the union contracts" and then he suggested that the president "call Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year. I’d bet it wouldn’t take him much longer than that to come up with the G.M. iCar."

Either him or John Galt. Or maybe Jesus.

But woe to anyone who suggests today that the "talent" at the top be required to sacrifice their gluttonous salaries as they continue to fail miserably. After all, they are the most productive people in the world, unlike those soft, shiftless factory workers, and if they aren't paid what they think they're worth they'll stamp their little feet and hold their breath until they turn blue.

Update: A emailer writes:


And the American International Group is contractually obliged to make bonus payments of nearly $200 million in March 2010. The company has promised to try to reduce that amount by 30 percent. But once again, there is nothing Mr. Feinberg can do because those bonuses were already written into contracts — and there is a high likelihood that the bonuses will create another furor in Congress, just as they did earlier this year.

A year ago:

For instance, it is critical for General Motors to be able to break its contracts with both its unions and its dealers. It needs to dramatically reduce its legacy benefits, perhaps even eliminating health care benefits for union retirees. It needs to close plants. It needs to pay its workers what Toyota workers are paid in the United States — and not a penny more. It needs to reduce the number of brands it sells — which means closing down thousands of dealerships, which is difficult to do because of state laws that protect car dealers. When General Motors shut down Oldsmobile, it cost the company more than $1 billion to buy out the Oldsmobile dealerships across the country. If it slims down its dealerships from 7,000 to a more appropriate 1,500, it will cost many times that amount.