Treasury's rescue plans

The Treasury's plans to rescue General Motors and Chrysler rest on the proposition that unions need to be bailed out, whatever the consequences to taxpayers, creditors and investors.

Under the General Motors plan, the government will own 50 percent of the new GM while the UAW will own 39 percent. The new board of directors will consist of government appointees and people appointed by the UAW. The government's appointees will be union sympathetic because the Obama administration is union sympathetic. GM's plan is union sympathetic. GM's reason for being will be to provide work for UAW members and health care and retirement benefits for retired union members.

Under the Chrysler plan, the UAW will own 55 percent (a controlling interest), Fiat 35 percent and the government 10 percent. Like GM, Chrysler will serve to provide work and fringes for UAW members and retirees.

All this has been tried before, without success. Unions do not make good business managers or investors. Their goals do not include business success but better pay, benefits and working conditions for members. Union managers keep their jobs by keeping their members happy. Growing the business, offering products customers will buy at prices customers can afford, satisfying customers, making a profit, offering investors a return equivalent to the risk they accept ... these are foreign concepts to unions and union members. If that were not true, GM and Chrysler would not now be insolvent, as they clearly are.

Chapter 11 is inevitable for both GM and Chrysler, if not now then in a few months or years. Despite the roughly $20 billion that Treasury has advanced from TARP funds, the situation now is the same as it was last December -- only now taxpayers stand to lose $20 billion. GM's plan, and Chrysler's, will only postpone the inevitable and increase taxpayers' loss.