Below The Beltway

There’s much discussion this morning about the supposed concessions announced yesterday by the United Auto Workers:

WASHINGTON — The United Automobile Workers union said Wednesday that it would make major concessions in its contracts with the three Detroit auto companies to help them lobby Congress for $34 billion in federal aid.

The surprising move by the U.A.W. could be a critical factor in the automakers’ bid not only to get government assistance, but also to become competitive with the cost structure of nonunion plants operated by foreign automakers in the United States.

At a news conference in Detroit, the U.A.W.’s president, Ron Gettelfinger, said that his members were willing to sacrifice job security provisions and financing for retiree health care to keep the two most troubled car companies of the Big Three, General Motors and Chrysler, out of bankruptcy.

“Concessions, I used to cringe at that word,” Mr. Gettelfinger said. “But now, why hide it? That’s what we did.”

(…)

Mr. Gettelfinger said Wednesday that the union would suspend the much-criticized “jobs bank” program, which allows laid-off workers to continue drawing nearly full wages.

He also said the union would agree to delay the multibillion-dollar payments to a new retiree health care fund that the automakers were scheduled to start making next year.

Beyond those two concessions, Mr. Gettelfinger said the U.A.W. would be open to modifying other terms of its contracts. Changes could include reductions in wages, health care or other benefits, and would require approval from union members.

As Ken Elias notes there’s much less to these “concessions” than meets the eye:

Big Ron told everyone that the UAW will “suspend the JOBS Bank” (money for nothing and your checks for free) and delay the VEBA funding payments (XXXL lootable health care fund). Woohoo! One slight problem though. We still don’t know the real truth. All we know is that the 2007 contract won’t be re-opened, just slightly modified. In other words, fuggadabout any major revisions JOBS Bank suspension might mean that the language in the contract stays, just that he’ll suspend it for a week or a month until Detroit gets a bailout. Yeah, big savings there. Not. And the VEBA delay? Ok, fine. Detroit can make the payment later. But in the meantime, Detroit still must pay retiree healthcare in 2010 and beyond until it can make the payment. So it’s just like before. An expensive drag on earnings. And yet the press is abuzz with talk of “concessions.” Fool them once…

The next act in this dog and pony show takes places on Capitol Hill today and tomorrow.

Update: Similar thoughts from Stephen Green:

[W]here’s the agreement to shutter 8.5 brands, 10,000 or so dealers and at least two management teams between them? Because until those things happen, it won’t matter how many concessions the UAW makes.

Absolutely right.