Though the way in which this is coming about is not the preferred method of bringing workers into more control over their labor, by obtaining some ownership control over the company they work for through bankruptcy—as noted by this article in the Wall Street Journal—the principle of labor as part of ownership is a long standing one in Catholic social teaching and may eventually become a good outcome that comes from a bad process.
"The Administration is hoping the judge will do little more than rubber stamp the restructuring deal it has worked out among the Treasury, the United Auto Workers and the Italian car maker, Fiat. It could play out that way, if Judge Gonzalez determines that $2 billion is the highest and best value that can be obtained for Chrysler's assets.
"But that is now the legal test that the Administration's plan must satisfy, not the political standard of whether the creditors "worked constructively" in a spirit of "shared sacrifice" that Mr. Obama set out yesterday. And let's hope Judge Gonzalez ignores Michigan Representative John Dingell, who yesterday called the investors "vultures" and warned darkly that they "will now be dealt with accordingly in court." Someone should tell Mr. Dingell that the debt-holders aren't on trial in a bankruptcy proceeding.
"It's especially rich for Mr. Obama to blast the creditors for seeking "an unjustified taxpayer-funded bailout" while offering the UAW a 55% majority stake in Chrysler. He also praised the large banks that hold most of the Chrysler debt and supported the government plan. But of course J.P. Morgan and the other big banks are also recipients of billions of dollars in taxpayer cash and have a strong interest in playing nice with their creditor, Uncle Sam Obama.
"The Chrysler creditors at least represent teachers, pensioners and retirees, among others. The Administration is advancing its own social and political agenda through its ever-deeper entanglement with Chrysler and General Motors. That explains why the government is giving 55% of the new Chrysler to the UAW's retiree-benefit trust, a junior creditor, while those ahead of the trust in line get a mere 30 cents on the dollar."