The Big Business of Big Labor
By: Timothy P. Carney
Examiner Columnist | 5/8/09 6:20 AM
Imagine if President George W. Bush used strong-arm tactics to bend the law to favor a politically connected company with $1.2 billion in assets, including a private golf course. What if that company’s political action committee had spent $13 million in the previous election, including more than $4 million to elect him?
Barack Obama has done just that. The company is called the United Automobile, Aerospace & Agricultural Implement Workers of America International Union - or the UAW for short.
Obama and the Democrats will employ euphemisms when discussing the President’s plan to circumvent bankruptcy law and hand majority ownership of Chrysler over to the UAW. They will speak about “the workers” taking ownership of the company, with some arguing that the workers, by right, are the senior creditors in Chrysler’s bankruptcy.
This paints the union-versus-creditors battle for control of Chrysler as a fight between blue-collar workingmen and greedy hedge fund speculators in suits.
But that abstraction—equating the UAW with “the workers”—is grossly misleading. John Doe on the assembly line will not be running Chrysler or directing the use of billions in bailout dollar. No, the union management will become Chrysler’s management.
So this is a gift to the union management, which, when you look at it closely, is a big, politically connected company whose executives pamper themselves and practice patronage on the backs of the workers.
Compare the UAW’s political activity to that of the most notorious companies that were cozy with the Bush administration. The autoworker union’s political action committee spent $13.1 million on the 2008 election.
If you take the PACs of Exxon, Halliburton, Peabody Coal, and Lockheed Martin, combine their 2008-cycle political spending, and multiply it by four, you get just over $13.1 million. The UAW’s expenditures on the 2008 presidential contest alone exceed the total House, Senate, and White House expenditures of those four companies.
And even Exxon Mobil gave 11 percent of its donations to Democrats. The UAW gave less than 1 percent of its money to Republicans. The auto workers’ union is far more wedded to the Democratic Party than any company is to the Republican Party.
The union’s $1.98 million to Democratic candidates last cycle (not counting the $4.87 million in independent expenditures to elect Obama president) is more than any PAC spent on Republicans. If you combine the political spending of the top three oil company PACs and the UAW’s PAC, Republicans and Democrats come out about even.
Peer deeper into the UAW’s finances, and it starts to look even more like a big business. The organization sits on nearly $1.2 billion in investments. This is money the UAW took from the paychecks of workers, money that now functions as an endowment out of which the union pays its staff and subsidizes its golf resort.
Black Lake Golf Club, which the UAW brags is "one of the finest anywhere in the nation," is owned by the union. Situated at the very top of Michigan, a drive of more than four hours from Detroit, it’s not exactly accessible to the union rank and file.
The resort is subsidized by workers’ paychecks, too—the union currently has $29.6 million in loans outstanding to the resort. That’s not their only posh real estate. The UAW’s Washington headquarters, home base for the union’s $1.6 million-a-year lobbying operation, is a beautiful $2.98 million townhouse in the DuPont circle neighborhood.
While UAW membership has fallen by 32.5 percent since 2002, the national headquarters has kept its spending nearly the same—a reduction of only 1.9 percent. Add these facts together, and it starts to look like the union management exists largely to preserve union management.
These are the people who would, practically speaking, own Chrysler under Obama’s plan. These are the benefactors of Obama’s upturning bankruptcy law and threatening investors.
But Obama’s team will maintain that it’s “the workers” who are taking ownership of Chrysler under their plan. When Obama and Democrats extend future bailouts and subsidies to Chrysler, they will have even more reason to claim that they are simply helping the workingmen. In truth, subsidies and special favors for the UAW are corporate welfare, and considering the UAW’s political activities, the right word might be crony capitalism.
Timothy P. Carney is The Washington Examiner's Lobbying Editor. His K Street column appears on Wednesdays.
