No, unions should not have additional bargaining power with companies that have received government bailout funds. The question posed to us, couchpotato, is very open-ended, but, when I read it, the companies that came to my mind were the "Big Three" American automobile corporations: General Motors, Ford, and Chrysler. Thus, these are the companies that I shall be focusing on.
As anyone with an Internet connection or a subscription to a daily newspaper should know, both General Motors (GM) and Chrysler have, within the past year, filed for Chapter 11 bankruptcy (
Link). Ultimately, both of these companies filed for bankruptcy in order to reorganize and receive bailout funding from the American federal government. Given this situation, two things should be obvious: one, these companies are in dire financial straits, and two, their operations are now being funded to a significant extent by taxpayer money.
While I would be hesitant to say anything about how these companies were run if they were struggling to make ends meet without federal funds, this is definitely not the case here. By providing monies to these corporations, the American federal government has essentially involved itself in an instance of overt client politics, where the costs of the instance are widely distributed (the American tax base at large) but the benefits are narrowly concentrated (about 2% of America's labor force, which would be even less if Ford was not included) (
Link). Essentially, then, Americans are upholding an industry that, for all intents and purposes, cannot currently compete with its foreign counterparts in terms of efficiency. While this relative inefficiency is partly attributable to American car companies' past reliance on the at-one-time popular sport utility vehicle (SUV), part of the blame lies with this industry's heavily unionized work force.
Undoubtedly, unions do great things for their members. Without them, workers in labor-intensive industries would not have some of the benefits that are regarded by many people (both outside and inside of these industries) as due to them. However, it is also undeniable that unions create economic inefficiencies; by making membership a requirement for employment and by insisting on contract negotiations and set wages, unions limit the labor pool available to companies and drive up their production costs. Unfortunately, though, market economies put the decisions on what to purchase in the hands of consumers, who are free to choose what they want by any criteria that they so please.
When applied to America's automobile industry, the previous paragraph's analysis proves very telling. The precipitous fall in the popularity of SUVs in America indicates that Americans value fuel economy. Given that American cars are only somewhat competitively priced, there exists little, if any, rewarding trade-off between an American car's initial cost and its substantial gas consumption. Thus, American car companies should be, first and foremost, looking for ways to either reduce the retail price of their end product, increase their cars' fuel economy, or both. Obviously, then, meeting new labor demands should not be bailed-out company's primary concern at this point in time.
Right now, American car companies need to focus on how to significantly increase their incoming cash flows. Given the time and financial resources unions eat up, they should currently have little, if any, bargaining power over the way American automobile companies run their businesses. From a trade perspective, economies are self-correcting; should America's automobile industry falter, new jobs will be created in some other existing or new industry that will replace those lost in the automobile industry. Sure, the new jobs may not offer the inflated pay and substantial fringe benefits of the automobile industry, but they will still put food on tables, clothes on backs, and roofs over heads. Saving America's automobile industry should be about saving jobs, not about saving a costly, government-funded cash cow.
