The American Airlines bankruptcy reveals the scope of President Obama’s political payback to the UAW. Unlike General Motors and Chrysler, American Airlines is undergoing a “normal” Chapter 11 bankruptcy according to the rule of established law. The GM (and Chrysler) bankruptcies of 2009 were directed by a White House task force that upended regular bankruptcy procedures. The White House objective was not to create a competitive new GM, but to get the best deal possible for the UAW and make GM a de facto “Government Motors.”
It’s not that the airline unions failed to deliver for Obama and the Democrats in 2008. The Airline Pilots Association contributed three quarters of a million dollars – small change compared to the UAW’s more than four million to Obama and the Democratic Party. Apparently you have to pony up big to get a deal from Obama.
The White House Auto Task Force and its Czar spared UAW the dismay and outrage of renegotiated union pay scales, revised work rules, and loss of defined-benefit pensions that American Airlines union members face. American’s anticipated fifteen percent job loss is about the same as GM’s, but without a dime of taxpayer money. Obama did not save GM jobs, he saved UAW pay scales and pensions. UAW members left their jobs with a $25,000 new car and $20,000 cash. (Chrysler employees left with much more). Laid-off American Airlines pilots, mechanics and flight attendants will likely leave with little or nothing.
I can imagine the UAW’s unspoken message for the White House in June of 2009: “Mr. President, in a normal bankruptcy, we might end up with the same wages as those scabs at Toyota and Volkswagen in the South. The court might order cuts in our pensions. We gave you our money, and you protect us. You can claim you are doing it for the middle class. That story might sell.”