Barney Frank favors bailing out the Detroit automakers over letting them go into bankruptcy. Chief among his concerns is that bankruptcy might "bust" the unions. You know, those organizations whose contract demands have put Detroit on the brink of extinction.
The Massachusetts Dem, chairman of the House Financial Services Committee, was interviewed by Maggie Rodriguez on today's Early Show. He appeared alongside Sen. Richard Shelby (R-Al.), ranking Republican on the Senate Banking Committee, who favors letting the automakers reorganize under Chapter 11.
BARNEY FRANK: Bankruptcy would be very disruptive. Bankruptcy is a favorite spectator sport for politicians and experts who don't have to engage in it. You have a whole network of suppliers--small businesses and others--who would get "stiffed," to use the legal term, in a bankruptcy.As our sister organization CNS has reported, "it costs over $73 per hour on average to employ a union auto worker." That compares to an average of about $43/hour for the non-union workers of the Japanese automakers with operations in the US.
There is also an assumption that if you do bankruptcy, you could undo labor contracts. Now the unions to their credit have negotiated some concessions. But you know, we already have too much union-busting and too much income inequality for the average worker in this country for us to now say by the way, if you're a company and you haven't been able to totally get rid of the unions, then go bankrupt and rewrite, write down the contracts.