As Goes GM…
…so goes California? WSJ: California Cities Face Bankruptcy Curbs. And it looks like the ultimate beneficiary of these proposed limits on bankruptcy are labor unions:
The [bankruptcy curb] bill was sparked by the bankruptcy filing last year of Vallejo, Calif…Vallejo’s city leaders partly blamed work contracts with police and firefighters for pushing the city into bankruptcy, and won permission from a bankruptcy court in March to scrap its contract with the firefighters’ union.
That spurred the California Professional Firefighters to push for statewide legislation to curtail bankruptcy, said Carroll Willis, the group’s communications director. “What we don’t want is for cities to use bankruptcy as a negotiating tactic rather than a legit response to fiscal issues,” he said, adding that he worries cities may work in concert to rid themselves of union contracts by declaring bankruptcy.
Not a perfect parallel to the Chrysler and GM situations, but it seems like the new trend in labor advocacy is to alter long-standing bankruptcy rules so that they benefit a select few.
So much for California’s state government confronting reality. Not that they’re willing to do so at all.
