U.A.W Gains in Detroit: Some Chysler Bondholders Balk

What is there to say, the Union will continue to extract maximum benefits from the companies, they companies will not profit, and the government will fill in the balance with bailouts to ensure the UAW stays in business, with the understanding that the Union will continue to vote for the Democratic party. Basically our taxpayer dollars are being used do Obama can craft a massive political machine that will ensure Michigan will continue voting for him and his party. All paid for by you and me.

Under the deal approved Wednesday, the union would end up controlling 55% of Chrysler's privately held stock. That stock, which the union is accepting rather than $7 billion in cash it was owed by Chrysler, will be used to cover the future health care costs of 65,000 retired UAW members and their families...........

According to restructuring plans proposed this week, the union will have more than half the stock in Chrysler and a third of General Motors, meaning it will have tremendous influence, with the government, in determining the future of the companies.

The United Automobile Workers union said Wednesday that its members ratified a cost-cutting deal with Chrysler by a 4-to-1 margin.

“Our members have responded by accepting an agreement that is painful for our active and retired workers, but which helps preserve U.S. manufacturing jobs and gives Chrysler a chance to survive,” Ron Gettelfinger, the union’s president, said in a statement.

The prospect of a big ownership stake for the U.A.W. in G.M. has angered holders of billions of dollars in bonds, who stand to get only a fraction of the restructured company. As for Chrysler, the banks, hedge funds and others that lent it money have been promised only cash, not stock.

“We believe the offer to be a blatant disregard of fairness for the bondholders who have funded this company and amounts to using taxpayer money to show political favoritism of one creditor over another,” a group of G.M. bondholders said in a statement this week.

Oh you bondholders, unless you can ring something to the table to keep the Democrats in power you will get nothing!

In the last 20 years, the U.A.W. has donated more than $25.4 million to federal candidates, 99 percent of it to Democrats, according to OpenSecrets.org, a site that tracks campaign contributions.

The union ranks No. 16 on the group’s list of top 100 political donors, known as “heavy hitters.” The U.A.W. was well ahead of G.M., which gave $10 million in that period, ranking it 73rd. Chrysler and Ford Motor did not make the list.

Mr. Gettelfinger, the current president, has also been an effective, steel-nerved leader, and has managed to maintain the union’s importance in recent negotiations, even though the U.A.W. has lost nearly 200,000 members since he took office in 2003.

Mr. Gettelfinger’s influence stems in part from the fact that the U.A.W. represents nearly all the auto workers at the Detroit companies. (Workers at a few plants are represented by the I.U.E.) By contrast, airline workers are represented by multiple unions.

“The U.A.W. is so overwhelmingly dominant,” said Duane Woerth, former president of the Air Line Pilots Association. “You’re only talking to one union and that gives them more power.”

Mr. Woerth, whose union was involved in 22 bankruptcy cases involving big and small airlines during his tenure as its president, said the pressure that bondholders and other investors might put on the U.A.W. has been mitigated by Democrats’ support.

You don't say, so now we have the spectacle of Federal dollars pouring into the companies, the companes then being handed over to the UAW, and the Union pouring money and votes to the Democrats. No where in the article is it mentioned about building better ot cheaper cars.

Update:
Chrysler bondholders to Government and UAW, Drop Dead!

DETROIT — Last-minute efforts by the Treasury Department to win over recalcitrant Chrysler debtholders failed Wednesday night, setting up a near-certain bankruptcy filing by the American automaker, according to people briefed on the talks.

And why shouldn't they, its a rotten deal and the the reason the banks, who owned 70% of Chrysler's debt agreed was due in no small part to Obama's strong arm tactics.

Chrysler goes under, white house is calling it a surgical bankruptcy.

DETROIT--The bankruptcy case, which government officials envisioned as a swift, “surgical” process, was filed in United States Bankruptcy Court in New York, with the first hearing scheduled for Friday morning. It is the first time a major American car company has tried to restructure under bankruptcy protection since Studebaker in 1933.