Contracts Can’t Be Broken—Unless They Involve Union Workers

[ProSense]

Contracts Can’t Be Broken—Unless They Involve Union Workers

by Tula Connell, Mar 18, 2009

Contracts can’t be broken. We learned that lesson well over the past few days when AIG honchos swore that despite being bailed out by $173 billion in taxpayer funds, they couldn’t break the sacrosanct contractual bond that guaranteed billions in bonuses to the same top executives who brought the insurance giant to its knees.

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When General Motors (GM) and Chrysler asked for government support in December, Sen. Bob Corker (R-Tenn.) pushed a pay cut amendment in the Senate that called for slicing the autoworkers’ wages to those paid to nonunionized workers. So, Bob, your fans are waiting breathlessly to hear you call for AIG billionaires to give back their bonuses. Or, as a columnist in Corker’s home state puts it:

Paging Bob Corker! Explanation please!

So, to make sure I have this right, we can give $185 billion to AIG and we have to uphold their employment contracts with 80 people, but we can’t give 1/5th that amount to General Motors unless they abrogate their employment contracts with 100,000 workers.

Yes, taxpayers own 80 percent of AIG. But we can’t seem to stop AIG execs from getting bonuses. After all, AIG CEO Edward Liddy and the company’s apologists argue, AIG knew it needed to keep its people. The implication here is that financial wizards who run a global company into the ground are more valuable than the blue-collar men and women who aren’t paid seven-figure salaries and whose jobs involve creating tangible products like, say, automobiles. Meanwhile, AIG bonus information so far includes:

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