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Auto Workers strike would trigger bailout default
January 09, 2009 by Ross Runkel at LawMemo
I'm told that one of the provisions of the federal government's loans to GM and Chrysler is that a labor strike would automatically put the companies in default.
If the union strikes, the loans default, and you know what that means.
You might be thinking, "Wow, that gives the union huge power."
Of course, the opposite is true. The union cannot strike, or the companies will drop dead. This, in fact, gives the companies a huge bargaining advantage.
For now, at least, GM and Chrysler are bargaining with a union that really cannot go on strike.
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