The US Congress and the White House seem set to finalise an emergency $15 billion short-term loan to keep the General Motors (GM), Chrysler and Ford car companies afloat.
The US Congress was warned that the total cost of the bailout could rise to $125 billion.
While Barack Obama supports a bailout, he has also called for the “restructuring” of the car giants, saying the US government would have to act in the same way as a bankruptcy court.
It is far from clear what this means for workers’ jobs or conditions.
Yet in a very worrying development the leaders of the United Automobile Workers (UAW) union are prepared to rip up existing contracts with GM and Chrysler and sacrifice job security and healthcare for its retired workers in return for promises that jobs will be saved.
The union has promised to consult members over any reductions in wages, healthcare and benefits.
UAW president Ron Gettelfinger said, “Concessions – I used to cringe at the word. But now why hide it? That’s what we did.”
There are widespread reports that GM and Chrysler will merge and that plant closures and lay offs will follow.
No Wall Street banker was asked to make such concessions in return for their bailout.