The New York Times (NYT) is reporting that contract negotiations between the United Auto Workers (UAW) and GM "appeared on the verge of collapse Sunday night." On the other hand, "the tenor of negotiations can change rapidly" and "despite the deadlock, a walkout at G.M. did not seem likely." In other words, the NYT doesn't know jack. That said, Michelle Maynard's speculation "inside sources" seem spot-on about one of the major sticking points: "Mr. Gettelfinger also was pushing for G.M. to put more cash in the health care trust, called a voluntary employee benefit association, or VEBA." We concur with the concept: the UAW wants the health care superfund funded with as much cash as possible, GM doesn't have cash (and getting more would be ruinously expensive) and the union isn't exactly wild about taking most of their payoff in GM stock (despite the expected surge in GM's stock price once the deal goes down) because they're not convinced GM can stave off Chapter 11; leaving their members without health care. They'll eventually settle on a mix, and GM will [re] guarantee a certain number of union jobs. Hey, if you're gonna speculate…
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Yeah, of course the UAW doesn’t want to be a major stockholder.Your right; the union wants to protect them selves from the unthinkable.
As a major stockholder,what position is the union gonna take if they gotta shut a plant down to save money,and boost the stock?
Even my limited education tells me this is a conflict of interest.
We are witnessing history being made.The extending contract running hour to hour?This old autoworker can’t remember that ever happening.
The deal expired on a Friday night and a bunch of hot heads didn’t walk out?Unbelievable
If Gettlefinger eats VEBA {a huge concession}the UAW has gotta sell it to the rank and file.Its gonna be a tough sell,but it will ratify by a whisker.
If the union comes to the membership with even more concessions? oh oh could be trouble.Gettlefinger knows this only too well.
GM wants core manufactoring,non value added work,call it what you will.What it means is, if your not bolting fenders on an Impala you don’t work for GM {BIG BIG concession}
Two tiered wages another minefield on GMs wish list.
Gettlefinger from what I understand is good solid stand up guy.I hope Ron and Rick can work it out if they walk/lockout both sides will take a big hit.
And to any UAW brothers and sisters reading this
We wish all the best, and good luck.
We have another year left on our contract,but I think when the dust settles in the U.S.General Motors is gonna call up Buzz,and say “we gotta talk”
Can someone answer this question?
If the UAW strikes, does it mean that GM does not have to pay wages and benefits during the strike? After all, these workers are no longer under contract.
If that it true, then wouldn’t GM benefit from a short strike of, lets say, 3 months? This would allow them to to save 3 months of expenses while continuing to sell all the product that is backed up in the retail pipeline.
I can’t help but think that somehow GM will benefit from dragging out negotiations for a few weeks.
yankinwaoz – you’re right in that GM wouldn’t have to pay wages & benefits to striking workers. However, the UAW will not strike all plants – they will target several key facilities such as Flint that supply most GM vehicles and just strike those. So GM is still on the hook for everybody else that’s not striking but can’t produce. Also, as it relates to revenue, GM records a vehicle as sold as soon as it hits the dealer (not when its sold to a retail customer). So, no production means no revenue. Lastly, GM operates with a sizable negative working capital balance (payables higher than receivables). In a strike situation those payables still come due but there’s no cash coming in to pay them. This is what makes a strike so onerous for GM. GM has sufficient cash to withstand a short strike, but its still very painful for them. Definitely not the preferred course of action.
Badger, that brings up a question that if the UAW stages a selective strike, can’t GM respond in kind by locking out the plants not affected by a strike?
That certainly would provide opportunity to clear out the inventory.
Funding the retirement benefits with GM stock would be a groundbreaking solution. Suddenly the UAW’s long term interests would be in large part aligned with the long term stockholders. Over time such a situation could revolutionize the relationship between the company and the union.
I’m not sure of the rules/laws in the USA.In Canada if any Canadian plants strike and it impacts other plants.Its called a labour dispute and nobody get paid squat!
Yankinwaoz:If Rick W and friends were so inclined talks would of broke off at about 4:00 Friday.The UAW would of
walkked at about 8:00 P.M.The pickets would come out, the beer would be flowing,and the barrels would be burning.It would be your classic Mexican standoff.Or mutual destruction if you would rather.
In 1998 A top G.M. guy called Don Hackworth took a shot at it in Flint.5 weeks into strike the market share tanked{it never came back}The dealers were P.O.ed and the stock holders wern’t too happy.The entire corp.shut down.
On the Union side, resolve starts to waver,the money gets tight,nerves get frayed.And the beer supply goes to a trickle.
And W.T.F happened? G.M.blinked!
Alls well that ends well Eh!
And as far as Don Hackworth and his crew?
In corporate speak you would say” Don and his crew are exploring new oportunitys”
GM can tolerate a strike better than the union.
The PR of reaching a deadline and week end negotiations, strike placards, folks waiting fot the call to either work or join the picket line. It makes for good PR.
I keep thinking of Coach Mechling, watching the track team at the first spring practice, knowing that McCarty was his most talented and least disciplined athlete, who smoked and never worked out on his own, pointing to a light pole and saying “McCarty is going to drop about there.” And sure enough, when McCarty, who had been far ahead of the other boys, got to the pole, he slowed to a jog.
mikey – I disagree with you that stock is a bad way to go. Right now (and probably rightfully so) the Managment vs UAW/CAW is a us vs them fight. If the UAW/CAW had stock in the company, then their goal would be to help keep the company going and do their best for the company. If the union guys had stock then it would be more “we’re all in this together” (which really is the truth – you are all in it together!)
As has been stated in other posts miked.Unions being stockholders changes the traditional roles.
Can you imagine the stockholder meetings after Rick comes up with the Executive bonuses?
Or how about we move engine assembly to Indonisia?
The union goes to the local and says”sorry about sending your job overseas”But dammit guys we gained 5$ a share?
As RF pointed, out GM goes to chapter 11 wheres that leave the VEBA?
UAW is gonna sell this to the membership by pointing out “this thing is gonna be bankrupt proof boys girls”
Something like Rick Ws pension/golden parachute.
Can’t keep the “Us vs. Them” battle cry going if UAW has a financial (Ownership) stake in GM. It must pain Gettelfinger to accept corporate stock.
It is like the difference between someone renting a car and someone owning a car. UAW will have to care about the value of GM instead of parasitically sucking the life from it.
For the predicted results see “the turtle and the scorpion”.
GM’s got a market cap less than 20 billion. They give the union too much money, it might use the healthcare fund to buy out GM!
mikey, I guess you’re right, giving Gettelfinger and pals won’t help anyone. But surely giving you guys, the guys actually doing the work, stock would be a good thing.
The UAW workers will NOT go without healthcare. Some government entity will bail them out with our money.
Even if we have to have Hillary Care, it will NEVER, NEVER, EVER happen. Get over it.