UAW to control Chrysler (updated)

By Michael Nadler

I suggested earlier that government bailouts of the automobile companies be conditioned on the United Auto Workers accepting a controlling ownership stake in the auto companies. I indicated that union ownership would be preferable to government ownership.

Today's WSJ reports in UAW to Get 55% Stake in Chrysler for Concessions:

The United Auto Workers union would eventually own 55% of the stock in a restructured Chrysler LLC under the deal reached by the union and the auto maker, according to a summary of the agreement that was reviewed by the Wall Street Journal.

Fiat SpA "eventually" will own 35%, and the U.S. government and Chrysler's secured lenders together will end up owning 10% of the company once it is reorganized, that summary said.

The summary was distributed Monday evening at a gathering of union leaders in Sterling Heights, Mich. The deal was first disclosed Sunday night. The UAW aims for Chrysler workers to vote Wednesday on the proposed agreement, which requires changes to the union's current Chrysler contract.

It will now be interesting to see how the union's investment does when the Obama administration forces our auto companies to develop and produce green cars, that consumers won't want, in response to a fictitious global warming crisis.

Update -- Richard Baehr adds:

Throw in the fact that Chrysler has 46,000 active UAW workers, and 250,000 retired UAW workers, drawing very rich pensions and health benefits. In essence, these companies are being kept alive not for current workers' benefit (and certainly not because consumers demand their cars) but for the benefit of the retirees.