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Only time will tell if the concessions are enough to protect Ford. I think they are headed in the right direction by moving as much out of the UAW controlled plants as possible. Building their competitive cars where strikes won't kill them is a smart move. Too bad GM did not have the foresight to move their top sellers to Mexican factories. The 2008 strikes would not have cost them Billions more.
Of these three parties, only the GM Execs have not been doing their jobs. Don't blame the UAW if GM was dumb enough to give them a contract that they couldn't afford. You give me $10,000 and I'm not going to shed a tear if you come back later saying you really couldn't afford to do that. That's your fault for handing it out, not my fault for taking what you gave me.
I still don't see what you're getting at, unless you think this is some massive conspiracy?
Well again not to give a labor law history, but the only ones that can franchise a union is Congress, aka a union is almost a regulated unregulated monopoly. So for example, if you wanted to start a GM union to compete with the UAW.... impossible comes to mind.
A UAW strike may cost billions, but it gives you options. Currently GM isn't selling cars and isn't making a profit. They wouldn't be around if W. had not handed them a check.
By playing tough with the UAW now, it gives GM long term viability.
Is that a Freudian strike there? :shades:
By playing tough with the UAW now, it gives GM long term viability.
Assuming the UAW doesn't also play tough, which they might. After all, why cave in to a company that looks like it may have to liquidate anyway, and stop making most of the cars that are built in your factories, and move all the jobs of your union brethren to Mexico? it's not in their interest to lose jobs that way, since each one of those jobs provides dues to the UAW.
Likewise why should the bondholders trade theyr higher priority bonds for lower-priority equity shares which would sink down to a few cents during a bk? It's not in their interests to do that.
Is that a Freudian strike there? "...
Indeed !
To dbostondriver: The apparent look back was to clarify a point, not to point out or to ignore billions are being lost strike or no strike!? Slip or no freudian!
If he made profit for GM, he would have been crowned the King of the Auto World.
I am sure nobody would have said then that Mr. Wagoner did not deserve it, even if the profits were purely due to luck.
For his failure as CEO this is the least that can be done.
Regards,
OW
Ford was able to get deep concessions from the UAW and just has about $10 Billion in debt swapped for stock. What happened to Fords stock today? It went up about 16%. No matter how you slice it, the US can make competitive cars without the UAW. BMW, Toyota, Honda, Nissan, and Mazda all do it.
http://finance.yahoo.com/news/Ford-completes-tender-offers-apf-14860782.html
You talking about the Bush Administration, the Obama Administration, or the GM Administration? :shades: Sounds like all 3 to me.
GM will restructure under bankruptcy and make competitive cars in ten years or so. Chrysler will die off and the Big Two will emerge stronger.
The reality is that unemployment is at 8.5% and most of the world is hurting economically. The UAW is no exception.
There are thousands of small businesses in the US, I don't see them asking for bailouts.
They don't have a corporate jet or a Congressman in their pocket. 99% of US businesses have NO voice with our Federal Government. They just pay the taxes and get the shaft on legislation. The Fat Cats get the big bailouts. If GM is broke how are they going to pay Wagoner his $23,000,000 golden parachute. Is that a gift from Barry for stepping aside and letting him be the big shot?
Regards,
OW
That's penny wise and pound foolish:
http://www.autoblog.com/2009/04/03/gm-and-aig-why-bondholders-might-want-bankrup- tcy/
When the two came back in March with half-azzed plans, incomplete plans and no agreements from the union or debtholders ... AND ... then they asked for more money, then both were dead meat.
Chrysler has been a corpse ever since Cerberus pulled the plug back in December. It has no chance of survival on its own. That's a no brainer and easy to deal with it. The Obama administration is just formalizing the death certificate.
GM is of course bigger and frankly more important. It also has some good assets and opportunities but the CEO was been waffling for this entire decade. He didn't do what the Bush administration said to do.....so he gets chopped. It's that simple in big business. I'd be shocked if he didn't know that when he went to Washington it was for his funeral. Actually I think the President handled both situation perfectly and sent a message to any other bozo who might think about coming begging to the Feds that it's 'perform or take a dirt nap'. I'd think that the CEO's of BoA and Citi are not sitting calmly now. Banks are being closed at the rate of one per week this year. Most of the ones being closed are the small ones thus I think that only because BoA and Citi are SO huge are they still alive.
GM has more time because it has more value. Bondholders will not be hurt by a bankruptcy. They will profit by it. They are the ones holding this up on all sides. It's the bondholders group that has all the power in this decision. ( explanation upon request ).
The rest of your paragraphs are a canned GOP rant. Political activism threads this way ======>>.
Didn't know the forum had a new host! :P
2014 Malibu 2LT, 2015 Cruze 2LT,
Don't tell me that you believed it when that auto executives first asked for what $14 B and that would be the LAST time !?..... :surprise:
..."A federal agency, which acts as pension guarantor of last resort, is running a significant budget deficit. Even so, it pays only a percentage of the defaulted pensions."...
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..."The Pension Benefit Guaranty Corp., the federal agency that guarantees corporate pension plans so that workers don't lose everything,"...
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It is actually a clue to how it will ultimately end up.
My take? Pennies on the retirement pension dollar. :lemon:
I know that Congress is you first whpping boy/girl for everything bad in the world from rain on golf days to wilting flowers in Hawaii. However in a more balanced world....
This mess has been brewing for 30 years. The main person at fault for all of this is Alan Greenspan. Since the Reagan administration he imposed his personal view of economics on all of us....ALL of us. We ate it up like chocolate cake with icing. We sainted him. He brought along every President and every Secy of Treasury and every powerful member of Congress ( OK ) to his 'let the market decide' point of view. The market is perfectly balanced and it will self-correct. In theory yes.
But what he admits that he didn't see was that too little control will send the market off into space with no controls, then when the rockets die out the economy will come crashing down. In this case we all die in the crash. There are no parachutes and no way to escape.
His lackeys in all of this are Robt Rubin, Phil Gramm, Henry Paulson and yes Geithner and Larry Sommers. Congress wrote the laws and relaxed the regulations (
Glass Steagall Act) so that Greenspan's free market could go forth unfettered. In addition those that saw it differently like the woman from the Commodity Futures Regulation office were told to STFU or you will lose your job ( Greenspan and Rubin in the 90s ). She didn't shut up and she did lose her job.Once in a while someone except Congress scews up.
And then there's US. We are actually the ones most at fault, maybe not individually but collectively we caused this mess by buying into Greenspan's dreams of an ATM in every den, one car per person in every house, markets that never go bust. We did most of the damage ourselves.
UAW's job is to look after the interests of the line guys. Bondholder council's job is to look after the interests of the bondholders. GM executives' job is to look out for the interests of the company.
Of these three parties, only the GM Execs have not been doing their jobs. Don't blame the UAW if GM was dumb enough to give them a contract that they couldn't afford. You give me $10,000 and I'm not going to shed a tear if you come back later saying you really couldn't afford to do that. That's your fault for handing it out,
The union and the bondholders are being good capitalists in fighting tooth and nail for every benefit and profit that they can make. They - fortunately it appeared - were fighting against the marshmallow men, the D3 negotiating teams. GM is the main culprit since it was the leader so often. GM's 90s negotiators gave away the shop at the threat of being struck and cutting off the supply of golden eggs from SUVs and trucks. The other two fell into line.
As a comparison CATERPILLAR ran into the same union, the UAW, and fought them tooth and nail for 10 yrs. They had management and scabs and soft UAW members run the plants for years...at huge profits. The UAW caved.
GM only dreamed of being that tough.
GM only dreamed of being that tough. "
We often disagree on many issues, but you got the aboved nailed. Good shooting.
However if GM goes BK and the pension fund is not fully funded because of the market collapse and there aren't enough assets to fully fund it then the fund and all the GM retirees payments gets dumped on the PBGC ( meaning US ). I don't know the terms of GM's plans but he might be limited to a certain %.
Or the next bailout loan from us will be to fund the 'shortfall' so that the new GM can emerge clean and squeaky.
>... he didn't see was that too little control will send the market off into space with no controls, then when the rockets die out the economy will come crashing down. In this case we all die in the crash. There are no parachutes and no way to escape.
>His lackeys in all of this are Robt Rubin, Phil Gramm, Henry Paulson and yes Geithner and Larry Sommers. Congress wrote the laws and relaxed the regulations ( Glass Steagall Act ) so that Greenspan's free market could go forth unfettered.
Surprise. I agree with this. It's continued over lots of years.
2014 Malibu 2LT, 2015 Cruze 2LT,
Now it's happening anyway...no thanks to successful negotiating. The products speak for themselves and the whole industry was caught off guard by the oil market and the recession.
Now that the government is in control, not too dissimilar to the PATCO situation, Obama must pull the plug on the business model that has been failing for 30 years in auto in the US.
There is really no other way.
Regards,
OW
Pension Benefit Gurantee Corp
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The UAW was a 'private' union so to speak in that it only dealt with 'private' companies not the government and there weren't any imminent safety issues to worry about. The Feds had nothing to say about the union or the 'private' negotions or possible strike.
Reagan would have been way out of line had he considered that...although I'm sure that he wouldn't have minded knifing the union in the back if he could.
No I have no beef with the UAW in this. It did what it should have done in our capitalistic economic model. Fight, threaten, cajole and then strike to get every penny and every benefit it could. It was fighting weak-kneed street-walkers with round heels that just wanted it to be over so that they could move on. Everything bad about GM since then has flowed from those failed negotiations. The Jobs bank, guaranteed health benefits forever at no cost to the members, fully funded pensions forever, too strict work rules, legacy costs, the need to cover these costs with hugely profitable SUVs and trucks, lack of attention to small cars due to small margins, over-emphasis and sticking with the BOF vehicles too long when the public began moving away in 2001 and most damingly the refusal to see the change in public buying patterns ( Lutz laughing at the Prius ) all flowed from bad decisions in the 90s.
Discussions
And a director to help local hard hit areas recover has been named.
"All these efforts, however, may be less important to Dayton than the latest one: the administration has named a director of the effort to help auto-towns recover from hits they have already taken.
"Deputy Secretary of Labor Edward Montgomery says he will focus his work on helping displaced workers get retraining, extended health care and extended income support."
2014 Malibu 2LT, 2015 Cruze 2LT,
This is why a lot of unions will tell you when your boss makes what you consider to be an unreasonable demand do it and then grieve it. Insubordination is a ticket to the unemployment line.
2014 Malibu 2LT, 2015 Cruze 2LT,
Interesting that the entire US auto industry wove the same spider web of failure.
Let's see what arises after the smoke clears.
Regards,
OW
..."In National Labor Relations Bd. v. Bildisco, 465 U.S. 513 (1984), the U.S. Supreme Court ruled that Bankruptcy Code section 365(a) "includes within it collective-bargaining agreements subject to the National Labor Relations Act, and that the Bankruptcy Court may approve rejection of such contracts by the debtor-in-possession upon an appropriate showing." The ruling came in spite of arguments that the employer should not use bankruptcy to breach contractual promises to make pension payments resulting from collective bargaining."...
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You're overlooking a fundamental distinction.
Air traffic controllers are Federal employees, & as such are prohibited from striking by long-standing Federal statute. Thus, the PATCO strike was unquestionably illegal, & President Reagan clearly had the law on his side when he fired them.
But auto workers aren't Federal employees (at least not yet), & no U.S. President has the legal authority to fire them.
When Reagan fired them I'm betting they didn't believe it could stick, but it did because he had the right and the power to do it. Didn't help them when the air traffic system didn't collapse like they said it would.
I ahd a lot of sympathy for the controllers but sometimes you can be just plain dumb.
It seems that PBGC has a dollar cap of $5400 per month. That should pretty well end Wagoner's opulent lifestyle.
Surprisingly we are on the same side of the fence today. Greenspan was not the genius he had most people believing. I do think that Congress went along as they were getting fat no matter which direction the wind was blowing. I wish I could say there was someone in government I am proud of. Just is not the case. We are in deep doo doo and I don't see any signs of improvement.
Talk about a political flip-flop. :shades:
"Abu Dhabi's royal family might invest in General Motors' German subsidiary Opel, press reports said Monday."
Abu Dhabi Royal Family Eyes Opel Investment (AutoObserver)
The bankruptcy readiness focuses on forming a new company from GM’s best assets if necessary, said the people, who asked not to be named because the matter is private. The cost-cut discussions center on how to go beyond GM’s proposal to slash debt by 46 percent and shed 47,000 jobs in 2009, and will include talks with Treasury officials, the people said.
The moves are a response to President Barack Obama’s March 30 rejection of GM’s bid to keep $13.4 billion in federal loans. With bondholders and the United Auto Workers balking at concessions, a push for more savings makes bankruptcy more “probable,” Chief Executive Officer Fritz Henderson has said.
GM’s board met today and yesterday, and more discussions are planned inside GM and with the Obama administration, the people said. Obama gave the biggest U.S. automaker 60 days to restructure, without specifying what steps were needed to stem $82 billion in losses since 2004.
I wouldn't count on that. The pensions and other benefits for people at his level are usually funded out of a different pot of money than are the pensions for the rank and file. I'm pretty sure those for the senior management at my company are. And, you can bet those obligations are fully funded. So, there is no shortfall when the companies goes belly up and the PBG takes over the (underfunded) plans.
Strikes are a waste of time and money on both sides. The UAW negotiated themselves out of jobs and a company to support their pensions and benefits at the end of the day. Effectively, no one is the winner.
It's the pendulum swinging too far thing. Swinging back in 2009.
Funny you should mention the government employee thing. Soon it will be party time and even more jobs will be lost instead of seeking a fair balance in the first place.
Regards,
OW
Regards,
OW
I am sure you are right on that one. You can see how Congress jumped to the aid of AIG that holds their retirement. All they ask is how many more $Billion do you need. While I know that PBGC and the ERISA act was important to protect the little guys from the big guys stealing the Pension Funds. It did have a negative affect on our Union Pension. The restrictions meant that payouts were limited. That is why I retired when I did. I could keep working and not get any more money from my Pension. I have a friend that retired in his early 50s. He had so many hours in the Operating Engineers that he was making less working than he gets in retirement. We got around it by having a 401K in addition to the money our company paid to the pension trust.
If GM had set up the same kind of pay as you go pension with the UAW they would not be asking for money today.