June 21, 2012
The so-called auto bailout was in fact a union bailout, Heritage Foundation expert James Sherk explains in this week’s Heritage Foundation podcast.
More specifically, it was a United Auto Workers bailout. Typically, when a company goes bankrupt the labor costs are lowered to a more competitive level. UAW worker wages were as high as $56 per hour in pay and benefits. The politically influential UAW solicited federal tax dollars rather than following the usual bankruptcy procedure of lowering wages. If they had simply lowered wages, taxpayers could have saved $26 billion.
This is especially unsettling considering President Obama’s 2008 presidential campaign. Candidate Obama ran on a platform of refusing to spend tax dollars on special interest groups. The UAW is a special interest group, and President Obama spent $26 billion on them.