Next Big Collapse: The UAW?
Posted by John Hitchcock on 2011/09/24
The news is out. The UAW is in financial difficulty. Based on the reports, without major changes, the UAW could be facing bankruptcy within 5 years. From The Truth About Cars comes the news. (HT Tea Party Patriots)
What they wrote may not have been known in public. The Detroit automakers are well aware of the perilous state of the UAW. In the run-up of the contract negotiations with the UAW this summer, one automaker did what one should do before going into battle: Assess the strength or weakness of the adversary. In-house economists of a Detroit company came back with a surprising piece of intelligence: The UAW is hollowed-out and heading for disaster.
In many ways, the UAW resembles the companies it opposed for so long. The UAW is America’s richest union. One of its biggest assets is its strike fund, which stood at $763 million at the end of 2010. If push comes to shove, a union is as strong as its strike fund. The trouble is: The UAW spends more than it takes in. Increasingly, the union has to dip into the strike fund, the Reuters report says. According to government filings, the UAW liquidated $222 million of investments from 2007 to 2009 to cover the shortfall between expenses and revenue.
In 2003, the UAW funded 1 percent of its 325.1 million dollar annual operating costs via selling assets and investments.
In 2007, the UAW funded 6.2 percent of its 327.6 million dollar annual operating costs via selling assets and investments.
In 2010, the UAW funded 22.9 percent of its 274.0 million dollar annual operating costs via selling assets and investments.
Reuters reports the UAW Labor Bureau filings are the source of the above data.
It looks like unless the UAW practices some serious Conservative austerity (like that’ll happen), it’s going to fail. It couldn’t happen to a nicer bunch of anti-competitive business destroyers. Bless their little hearts.
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