The auto workers get control of Chrysler and GM. Can they make a profit?

By PAUL INGRASSIA, The Wall Street Journal

The latest developments in Washington’s restructuring of the auto industry amount to this irony: Having burdened the Detroit companies for decades with restrictive work rules, enormous health-care obligations and generous retiree benefits, the United Auto Workers union will now end up controlling two of them. Specifically, the UAW will own 55% of Chrysler and 39% of General Motors, where only the government will have a larger ownership interest.

Assuming that negotiations over the next few days or weeks don’t change things, it’s hard to know whether this outcome is perversity or poetic justice. The UAW finally will end up having a direct stake in the survival and prosperity of General Motors and Chrysler — even though the union’s shares in the companies will be held by special trust funds instead of by the UAW itself.

Whether the union’s rank and file will recognize its interest in the companies and act accordingly is another matter. Consider that one of the terms of Chrysler’s pending deal with the union is that workers won’t receive overtime pay until they work more than 40 hours in any given week.

One might well ask: Wasn’t it always that way? Well, no. Often enough, the union negotiated production quotas in local plant contracts that workers could fill in five or six hours a day — after which any work they did qualified for overtime pay. Now you understand one key reason why Detroit has arrived at this unhappy juncture.

Read the rest at the Wall Street Journal.

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