It looks like GM's labor pains are just starting. The Detroit News reports that strike threats are coming in from sites around the country. While The General is busy dealing with a strike at their Delta Township, MI plant, they also have to defuse threatened walkouts at plants in Parma, OH; Mansfield, OH; Grand Rapids, MI; Kansas City, KS; Flint MI and Arlington, TX. And that's on top of dealing with parts shortages caused by strikes at suppliers American Axle and Alliance Interiors. Even though UAW prez Ron Gettelfinger says he supports the strike actions, he seems to have forgotten the fact that the actions are a backlash caused by the contracts his minions acquiesced to negotiated last September (and strong-armed the members into ratifying). At the time we wondered how workers could agree to the contracts; it seems that they've "woken up" to the reality. Once the Locals settle their differences with GM, you have to wonder if they'll have the same issues with the Ford and Chrysler, and if they'll go after the UAW's leadership for putting them in this situation in the first place.
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If I’m not mistaken, isn’t GM’s problem that it creates too many cars?
What happens if GM files for Chaper 11?
(lol, “if”)
Then that means when the new GM emerges from bankruptcy that they won’t have to pay workers if/when they strike… which will allow them to produce less cars, which they currently over produce.
It sounds more and more like bankruptcy would be a good thing for GM, allowing them to trim a lot of the fat as well as get rid of workers they overpay for uncomplicated factory work.
Harsh?
-AttV
In the current situation, GM isn’t producing too many cars….
If UAW rank and file agreed to the contracts, how can they strike against them? Wouldn’t that be illegal?
Would this mean that if GM agreed to something it later regretted, it could just “go on strike” too? Maybe just cut back benefits, or get rid of vacation or overtime pay?
I’m not so sure this isn’t a bad thing. GM really might be best to go C11 and re-organize. In the same stroke, they can kill their bloated dealer network, shed useless brands, and kill the UAW. Unfortunately GM workers get hurt, and shareholders too. Might kill sales as people don’t want to buy cars from a bankrupt company.
With all the plants idled due to parts shortages and all the strikes I have to wonder if this wasn’t all planned and they are going to file CH11 soon. In the other article revolving around AA GM’s management is in no hurry to end the strikes, so I have to think they planned this. And what better way to make it look like it isn’t their own fault? Get the UAW to strike all over the place, file, and point the finger at them in court.
I think the UAW is forgetting the first rule of a successful parasite: Don’t kill your host! We have the worst economy in 28 years and they’re striking over having non-union untouchables on the floor?? More and more, I think now is as good a time as ever for GM to bite the bullet and go Ch 11. Ask the UAW’s workers at Delphi how that all worked out.
Jerome10 has raised a very interesting point.
If you ask GM management about their current sistuation, they say how all GM brands are staying, their dealership network is fine and they are getting along just corky (Copyright KatiePuckrik 2008) with the UAW. As far as GM management are concerned, all is well with GM.
Now let’s imagine that GM, tried their best, but eventually ended up filing Chapter 11. Now GM have a chance to re-organise the company with impunity. They can make cuts wherever they want and actually do some meaningful change at GM.
This would be a very interesting situation to watch because, if GM management start killing brands, dealers and severing ties with the UAW, then it shows that it was GM’s M.O all along, but they just didn’t have a viable chance to do so, which also means that GM’s management are telling a few fibs. However, if GM management leave the marques, dealer network and UAW alone, then GM management are genuinely clueless as to how to save GM. Either way, it doesn’t look good for GM’s top brass…..
Jerome10 :
April 22nd, 2008 at 10:51 am
Unfortunately GM workers get hurt, and shareholders too.
Don’t forget the communities that lose jobs and tax revenue.
They get hurt too.
I know it’s fun to bash the domestics, but if they start cutting spending radically our nation is going to feel the bite.
New import sales will take up some of the slack, but not all of it.
There are many small towns in this country where the largest employers are the dealerships that sell domestic pick-ups and sedans, and more than one kid has gone to college on wages earned by a domestic salesman or mechanic.
If you want to know what America is going to look like when the big 3 get serious about bankruptcy take a long hard look at northern Ohio, southern Michigan, and southeast Canada.
I sincerely hope that higher quality interior plastics and fewer trips to the dealership generate enough jobs to offset the collapse of the big three.
don’t know if this has been covered before—but why is it that the UAW seems to be targeting GM vs. Ford (or Chrysler for that matter). it did appear that during the recent milestone talks…Ford and UAW seemed to be much more amicable…not sure why this was the case or if it is a good thing long term.
That said…the labor situation certainly seems to be affecting stock prices as Ford shares have gained 50% over the last month (5 to 7 3/4) while GM shares have slid.
Probably much more to this story than labor unrest (eg. Ford can articulate a coherent long term strategy)…but it has to be a component.
Just because they have an agreement doesn’t mean they can’t strike. Especially in the case of a new agreement where the current execution doesn’t reflect the expected interpretation.
Here’s a really petty example from experience. After interminable negotiations a provision in the agreement called for the company to provide free coffee and ice. Coffee makers and ice makers were purchased for each lounge, but coffee was only brewed in the morning and the ice maker ran once overnight. The union went on strike. Ridiculous? Sure, but management thought they had honored the terms and the union thought they were getting shafted. The end result of a one day strike was coffee all day and the ice maker refilled once per shift. Woohoo.
The reason is Ford’s management gets it…GM’s ruling elite does not b/c they have absolutely no accoutability or have any goals.
Just remember folks, management will tell you everything is hunky-dory and go pull the rug out from under you in a heart beat.
I worked for a company and rumors started swirling about being bought out. They called a town hall meeting and the #2 in the company proclaimed that the company was not being sold. Flash forward 8 days later and we’re all told we were bought out and they aren’t keeping us.
Mj0lnir:
On one level, I take your point. There will be some serious impacts on jobs(I work at a GM dealer myself).
But the point of having a job is wealth. It’s a happy coincidence that conditions of freedom create more wealth than does centralized state control. (Most people do not get up in the morning eager to enter Cuba, despite all the ‘protections’ provided by the benevolent State).
And, speaking of states, Ohio, Michigan ALSO need to look at…Ohio, Michigan.
High taxes, (Michigan just raised theirs) arbitrary regulations (‘shops’ ‘closed’ to the best efforts of free American citizens ?)does not seem to be the best sales pitch for attracting people, commerce, industry, and jobs.
@powerglide :
April 22nd, 2008 at 12:16 pm
I understand your point, but those two states aren’t the only ones with obscene taxes and bad governments.
I’m certainly not giving those states a free ride, nor am I absolving management and labor at the big three.
What I am saying is that it appears that many people are “interested” in seeing how our automakers will be “fixed” without considering the national pain involved in doing so.
Parma rolled over last week. They’re back to work, the UAW loves to rattle their sabers every 4 or 5 years over there.
Det News is reporting that Parma rejected the new contract and will going out on strike too. SOunds like a conspiracy by the UAW to me. GM probably deserves having the UAW as their union. They both deserve each other IMO.
Like two scorpions in a bottle. Or a nasty divorce case. But I have to admit, if I was getting gypped on the coffee and ice, I’d want to walk out too.
Mj0lnir :
Appreciate your perspective.
As for national pain, I’d say we’re ALL sailing into a @#*&storm.
A decisive time, like the early 1930s, and for many of the same reasons.
But many times America has reinvented itself out of danger, dropping dangerous ideas, practices along the way, so there’s a substantial basis for hope.
umterp85:
Ever since Henry Ford II took over the company in the 1940s, Ford has typically had the best relations with the UAW among the domestics. This continues today.
Note that even before last fall’s contract negotiations, Ford was having much more success in persuading UAW locals to accept competitive operating agreements in individual plants than GM was. Also note that Ford leaders are much less likely to blame the company’s woes on uncompetitive wages and benefits for blue-collar workers, as compared to GM management.