How about paying back the $15 billion first? I’m sure there are sophisticated arguments for why the UAW members shouldn’t pay back the taxpayers who bailed their employer out of bankruptcy before they negotiate a deal that gives them each a $5,000 bonus. I just can’t think of them right now. … Just from a PR standpoint, repaying the debt would seem like a good idea. …

Sure, as a going concern, GM has to pay to keep its employees from bolting to a competitor. But what are the odds that most of GM’s UAW workers (i.e, the ones not in the $14-an-hour Tier Two) could find jobs anywhere near as good as the ones they now hold? Almost all their leverage comes from the Wagner Act’s power to strike and not be fired. Without Wagner, they’d be free to quit, which they would not do. (Go ahead. Make GM’s day.)

The $15 billion aside, if GM is so profitable it can afford to give its new hires a raise and all its UAW workers plush health benefits and a big bonus, that’s great. But why do I fear the economic assumptions underlying these numbers will prove to be unrealistic? Sure, GM’s doing OK now, with two of its major competitors  (Toyota and Honda) crippled by the Japanese earthquake. Those two are now coming  back online, while other GM competitors like Hyundai and VW are gaining market share. VW, at least, is explicitly pursuing a low-cost price-chiseling strategy, the better to exploit its non-union wage advantage. Plus the whole new car market may be shrinking as the economy stalls.

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