Wohlust: Biden-backed strikes could seriously damage auto industry

Generous United Auto Workers contracts eventually drove General Motors and then Chrysler into bankruptcy, plus severely wounded Ford.

The Obama administration used taxpayer money to recapitalize the companies and to fund the insolvent union benefit funds. The stockholders were wiped out. In the ensuing years, the companies returned to profitability, especially in recent years. UAW now demands to “share” in recent profits by demanding record-setting new contract terms, and the president and his administration are backing them. At the same time, the government requires the manufacturers to produce more and more electric vehicles, which they can only sell at substantial losses, even with government subsidies (more taxpayer funds.) The companies have been funding these losses with the profits from recent years, as they try to find a way to stem the losses from building EVs.

Investors who believe the American auto industry will emerge from the current government-backed strike attack without serious damage should be buying General Motors and Ford stock. There don’t seem to be many of them.

Ron Wohlust

Dagsboro

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