CAGW Opposes Taxpayer-Funded Bailout

(Washington, D.C.) – The nation’s premier taxpayer watchdog group, Citizens Against Government Waste (CAGW), today criticized both the management of the “Big Three” automakers and the leadership of their unions for their arrogance and sense of entitlement.

CAGW President Tom Schatz appeared this morning on ABC’s Good Morning America in a piece by ABC’s Chief Investigative Correspondent Brian Ross exposing the fact that auto executives flew to Washington, D.C. in private corporate jets to beg for a taxpayer-funded bailout.  In addition, the United Autoworkers Union (UAW) has stated it will not modify contracts or relinquish benefits in order to give automakers the flexibility to restructure and retool.

“Both sides are to blame for the failure of the domestic automakers.  Neither executives nor the union is willing to acknowledge culpability, nor will they give up their perks and benefits to help dig out,” said CAGW Tom Schatz.  “Instead, they have their hands out for a taxpayer-funded golden shovel.”

General Motors CEO Rick Wagoner received a 64 percent salary increase to $15.7 million in 2007, when the company was shutting down plants and posted a $39 billion loss.  He has stated that he sees no reason to resign.  Chrysler Corporation is still planning to distribute $30 million in retention bonuses to 50 of its executives, six of whom will receive between $1.5 and $1.9 million.

UAW President Ron Gettelfinger told the Financial Times on November 17, 2008 that “the focus has to be on the economy as a whole as opposed to a UAW contract.”  The union will not provide “givebacks” for healthcare and pension liabilities, nor is the UAW willing to renegotiate counterproductive union rules that have made the companies inflexible and uncompetitive.

“It is time to apply the brakes to the bailout bonanza.  The industry should be forced to reap the rewards of decades of bad decisions, failed management, and a union culture of entitlement.  Instead of ripping off the taxpayers with an open-ended bailout, Congress should consider proposals for a ‘structured’ or ‘prepackaged’ bankruptcy instead of perpetuating the status quo,” concluded Schatz.      

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.