Administration officials said it would be wrong to think politics had any role in the outcome at Delphi. They said G.M. paid top-ups to the union retirees because it had promised to do so in 1999. The white-collar retirees got nothing because G.M. had not promised them anything.

Legally it would seem that GM had a debt to the union that it didn’t have to the white-collar workers. In theory GM could have discharged that debt in its bankruptcy but unlike the white-collar workers it needed the UAW to survive and the UAW was looking out for its own. It would seem to me that this is an example where paying those union dues was worth it….at least in this case.

I think Marx has a less to do with this story than the fact that unions are better at looking out for their own. If there was a white collar union it would fight to save those pensions and the unions would be very, very happy with a change in the law that made it legal for white collars to organize.

I suggest going to the actual NY Times article and read down to the bottom of page 1 and then page 2. Delphi is the spawn of GM. When GM spawned it, it funded all the white collar pensions which is what a company is supposed to do when it spins off a division. GM didn’t have enough money to fund the union pensions so it made a promise:

The unions threatened to block the spinoff. To appease them, G.M. promised that if the pension fund for the hourly workers at Delphi ever collapsed, it would restore any benefits that the government refused to pay.

White-collar workers did not get such a promise. They said they did not expect to need one; their pensions were fully funded.

What they did not take into account was how quickly a pension surplus can evaporate. A big chunk of the money disappeared in the bear market that followed. An emergency financing rule eventually forced Delphi to pump more money into the pension fund — but by then the company was in trouble. Delphi declared bankruptcy in 2005, to avoid having to spend precious cash on more pension contributions.

Nothing there about “stint” length. Pensions are common in white collar jobs at large corporations … I think you know that.

I’m not sure I get this. If white collar workers don’t have pensions then why would their pensions get bailed out? Unions are good at securing pensions for their members. There are few white collar unions because the law offers little to no right for white collar workers to unionize.

There are some economic reasons for that. Unionized work tends to favor long, continuous stints in jobs that you don’t necessarily want a lot of turnover. Hence autoworkers get pensions which rewards them for sticking through it for decades. White collar work not so much so pensions are less common *but* the higher turnover leaves open the possibility of scoring a high pay job after hoping from company to company building experience.

Some white collar jobs do tend to favor long continuous stints. Not surprisingly, you’re more likey to fine pensions there. For example, teachers usually have pensions.

Two flaws in the analysis:

1. Assuming luxury non-clunker eligable sales are a proxy for clunker eligeable sales. This analysis is essentially predicated on trying to predict what would have happened if there was no clunker program. I’ll note that people like Mark tend to dismiss this type of analysis when applied to, say, the stimulus package, even though the theory behind that analysis is a lot stronger.

2. The program was an odd combination of environmental program AND stimulus program. Therefore, evaluating it only in regards to how many new car sales it motivated is too one sided. Even those who were going to buy cars anyway got $4500 in stimulus.