Well, he should know. I mean, when the head of the United Auto Workers (UAW) says GM can’t satisfy Congress’ conditions for a second major suckle on Uncle Sam’s teat, you gotta listen. Big Ron Gettelfinger is the guy who has to agree to an equity-for-health-care-payment swap as one of the two major conditions for the cash. “Honestly,” Ron Gettelfinger says, signaling the spinmongery to come. “Most people that have looked at this from a realistic standpoint would say this timeline is almost unattainable. I said myself that I hope this wasn’t set up to intentionally fail… People have no idea of the magnitude of what they were asking these companies to do.” Or to paraphrase John F. Kennedy, ask not what the UAW can do for GM, ask what Congress can do for the UAW. Or to not paraphrase John F. Kennedy, “We’ve done everything we said we were going to do up to this point,” Gettelfinger maintained, assuming that no one will attempt to substantiate a single union “give back.” “We have ongoing discussions with the companies — but nothing formalized in any way shape or form.” No surprise, then, that Gettelfinger said there’d been “no real progress” on a new agreement. The charade continues– until the congressional deadline of February 17. And beyond!
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We here in Canada are in the same situation. A report today in The Globe and Mail quotes the Government Minister involved in the ChryCo and GM “bailouts” as insisting that CAW autoworker costs be reduced by up to 1/3 in order to get the financial aid.
This link is to a video response by CAW President Lewencza to these demands.
http://www.theglobeandmail.com/servlet/story/RTGAM.20090119.wvbnnvideo_Lewenza0119/VideoStory/VideoLineup/Business
All the UAW needs to do is to stand pat. $70 per hour on the tax payer is a done deal when the Obama ripoff will push a Trillion.
Hey, that’s my favotite muppet! And the picture’s nice too…
1/20/2009 is here boyz n girlies. UAW chronies run the show in DC and DET. Pony up some more $$$ and make it round at the 11 figure range – how’s $100,000,000,000 sound for 2009-2010 to pay the piper? I mean prop up DET/BIG 3?
So far we have GMAC paid 6B, Chrysler Financial 1.5B paid last week, Ford Credit TBDB soon on the “finance side”.
This is a neat way to put to Japan and German car co’s. Throw the cash to Detroit. After a while, Japan and Germany go under. Just ask BMW. 2 years of this and they are “out of cash”.
Here’s my open letter to Ron Gettelfinger:
Ron
You’re going about this all wrong. you’re waiting for leadership from Rick Wagoner. That’s the sure path to unemployment. You have to seize the day. The UAW through its pension funds is GM’s single largest creditor. You have to act like it. You need to demand control of the company. You need to demand a new board and new management and concessions from the lenders. You need to put forth a cogent plan that is internally consistent. That means you propose the lender cutbacks and you sweeten the pot with enough concessions to make the politicians sign on. In return, you should expect that General Motors becomes a company owned by its employees, pensioners and creditors, with a significant chunk of taxpayer shares as well.
If you don’t take responsibility for putting together a plan, you shouldn’t assume that somebody GM management is going to do it. If they haven’t made it clear to you by now that they don’t know what they’re doing, I don’t know what it’s going to take to convince you.
Tick Tock.
Or to paraphrase Pericles…”Voters are Stupid”.
Seriously…Is Gettelfinger a man or a tapeworm?…Seriously.
How does that porn-mustached dude look in the mirror and like what he sees? Seriously.
What is your problem? Do you have health care? Yes is it subsidized in one way or another by your income? YES wouldnt it be better if you made less and were unable to pay for it thereby saving your company money? HMMMMMMMMMM Human rights are here whether you like auto workers or not. I know they are beneath you. But they are human beings also.
GM burned an estimated $20B last year. Spread over 2.9M vehicles this is $6900 burned per vehicle. Explain that away Rick. This is not a sustainable buisness.
Scartooth- with all due respect, this is not about human rights. Others with lower incomes and fewer benefits do not want to subsidize the lifestyle of the UAW worker. Nor should they.
Bunter
Conslaw, You have it wrong. it is the US Govt which will be taking control of GM and others. The Govt may not be the biggest stakeholder in the car business yet, but they will be. One more injection by congress, and the mantra is we can’t lose our seed money, we have to continue on. I can even see the govt offering tax incentives to buy the cars that they caused to be produced. This would be the full circle of nationalization. Oh yes, and if we are keeeping these companies alive for future military and defense purposes then let’s make them part of the dept. of defense.
I also read the News item in the Detroit Papers of what the Head of the UAW said, its really not hard to believe either! Like the CAW head guy they both have there heads rammed up the ass of the so called Big three, did we expect any change? I dont think so. In the Canadian Papers the head guy here in Canada of the CAW(Auto Worker section)he said he talks daily with the head of the UAW! So you see they have to stick together like glue on fly paper! and so it goes and to held with the Taxpayers in both of our Countries!
Well now we will see if President BO will stand up to the UAW or follow the lead of Pelosi and Reed and and start the multi billion dollar paybacks to the UAW in thanks for the 100’s of millions the unions have donated to the Dem’s. I believe the latter. The Dem’s owe the UAW far to much not to open the tax payer dollars. Take from the successful companies and give to the unionized unsuccessful. What a country! Where else can you run a company with outdated work rules, hugely overpay the workforce, retire everybody at 50 years old, provide unheard of benefit packages and build a product people don’t want and then roll in the cash from the frugal successful people.
Next on the agenda, do like FDR in the old New Deal and confiscate the gold from the citizens. I am sure that is in the Constitution.
Best thing for the country would be bankruptcy which would force the companies and the UAW to face reality.
“lets make them part of the dept. of defense” says Jerry – well, then we’ll be precisely where communist China and the National Socialists in Germany (NAZIS), as well as the Soviet Russian communists, were. Not to mention the East German communists, the Czechoslovakian communists, the Romanian communists and the Polish communists.
Of course, as far as I’m concerned, since October 7th (when the Con-gress bailed out the banksters), we haven’t had a legitimate government and I see nothing CHANGING today for the better.
Welcome to the Oligarchy-Kleptocracy New World Order.
If Ron is waiting for something constructive to come from GM’s management, he’s going to be waiting a while. Take the bull by the horns, Ron. You know what you need to give to get the ball rolling with the other stakeholders, so get on it.
scartooth : Hyperbole, table for one…
Seriously, Gettelfinger and the UAW could look like heroes right now if they weren’t doing what the UAW always does and digs its heels in. The concessions being asked from the UAW aren’t going to make it so their workers can’t put food on their table or gas in the boat in their driveway. It is quickly getting down to either the UAW makes some concessions or their members start filing for unemployment en masse.
The UAW and its members has made themselves rich because they took advantage of a time when the artists formerly known as the Big 3 would do and sign anything to avoid a strike. True, management has painted the companies into a corner, but now is not the time to be douchey about things, especially when your peoples’ entire paychecks are at stake.
Gettelfinger isn’t budging and in a few hours, he’ll have a President who’s going to be paying labor unions back for their votes. RIP, domestics.
I used to discount the UAW for Detroit’s problems. “It’s the cars stupid.” Well, GM and Chrysler still aren’t making cars that people want to buy but I think Gettelfinger and the UAW will be the straw that breaks the camels back – NOT the cars.
While I think anyone with 40% losses in their 401k should be at the gates of Wall Street fat cats with torches and pitchforks….but any UAW worker should be doing the same at Gettelfinger’s residence. He is destroying Detroit and endless Obama bailouts won’t save a thing.
While this may appear to be a case of feet-dragging by the UAW, the whole equity-for-cash mandate is quite complicated. Don’t expect the bond holders to finalize anything anytime soon, either.
Believe me, I would like to hear from the leadership that this will be resolved by the (seemingly) arbitrary deadline to everyone’s satisfaction. I do take exception to characterizations of our benefits as “unheard of”. Throw the soon-to-be-dead JOBS bank into that category if you will, but pensions and healthcare are hardly atypical.
As far as outdated work rules, if that were the case, how is it that 9 of the top 10 most efficient assembly plants are union represented, according to Harbour?
And one more time, we do not make $70 an hour in wages and benefits. Even the MSM has gotten off of that.
And one more time, we do not make $70 an hour in wages and benefits. Even the MSM has gotten off of that.
Yes, but the starting rate for a UAW worker is $27 per hour which is $56,000 per year. You are grossly overpaid when your starting rate equals (or in many cases exceeds) that of a starting engineer. Also, your health care contributions are laughable compared to said engineer, and let’s not get into 401k versus pension.
Face it, lineworkers are overpaid. They do not have a marketable skill set whatsoever. They do not weld, they do not fabricate, they are simple bolt turners.
GM’s responsibility to the public
Larry Burns, GM Vice President of Research & Development, wrote that “The solution lies in sharing the public/private risks and rewards – possibly creating a partnership between the U.S. government, auto manufacturers and suppliers, the energy and infrastructure industries, and other key stakeholders focused on transforming the automobile.” Perhaps GM should consider a new model for public-private partnerships beyond the bailout.
As the Federal Government issues billions in bailout packages, local municipalities compete for manufacturing jobs with individual firms receiving customized tax packages. Large corporations such as GM have armies of tax advisors, strategists, consultants and attorneys to their disposal. Smaller municipalities may not have these resources, but must pick up where a corporation leaves off. For example, the town of Vance, Alabama and associated local government agencies offered Mercedes–Benz 362 million USD in subsidizes to attract foreign direct investment into the town. The factory builds automobiles and thus increase the town’s share of Gross Domestic Product and the advanced technology that the company brings will increase productivity.
This is a common practice in the United States where cities and states compete for corporate investment. Part of the package came in the form of tax breaks against future earnings. Others, such as the construction of new roads, was an advance investment by the city. Thus the city made a trade off between building a road for the company verses building a school or hiring more police. The government justifies the expense because of expected future returns in tax revenues form the factory and employment for the local workers. This is also therefore an attempt by the government to shift the unemployment. General Motors is also accustomed to receiving generous government support, such as $200 million from Canada in March 2005 and subsequent closing of multiple fatalities in Canada. What is the result of these subsidies? Do auto manufactures build a commitment to a community and stay in the long-term? Or do these corporations plan to simply leave for the next best opportunity where another municipality will offer even better subsidizes?
Dennis Rondinelli and William Burpitt of the Kenan-Flagler Business School, University of North Carolina, Chapel Hill hold that incentives are not a primary factor for executives considering investing in North Carolina. In Do government incentives attract and retain international investment? A study of foreign-owned firms in North Carolina shows that “In an era of strong global competition, national, state, and local governments are vying to attract and retain investment by international firms by increasing the range and value of public
incentives for businesses to invest in their jurisdictions. A survey of executives in 118 internationally-owned firms in North Carolina reveals that they rank state incentives low in a list of factors that they believe attract foreign-owned companies and retain them in the state. Labor force, trans-transportation, quality of life, and overall business climate factors are consistently ranked highest by business executives, and state tax, finance, plant services, and marketing assistance are consistently ranked low. (Rondinelli and Burpitt, Policy Sciences, June 2000).
In a similar way, Dafna Schwartz, Joseph Pelzman, and Michael Keren at Ben Gurion University of the Negev, George Washington University, and Hebrew University of Jerusalem, respectively, show that incentives do not contribute to long-term economic development in The Ineffectiveness of Location Incentive Programs. “Many countries use location incentives programs to attract investment into a recipient country as a whole or to priority regions, with the goal of promoting growth….In both cases (Israel and Puerto Rico), the programs led to increased employment in the short run but did not alter the fundamental economic problems of these areas…. there is a governmental failure in their operation of location-related incentives programs and that these governments find it difficult to discontinue incentive programs once they have been introduced. Schwartz, Pelzman and Keren, Economic Development Quarterly, Vol. 22, No. 2, 167-179 2008)
Mr. Burns, General Motors has asked for billions in special support from taxpayers. With respect to sharing the public-private risk, the history of auto manufactures such as GM, the risk is primarily on the side of governments, with the sharing of benefits is primarily on the side of the manufacturers. What is your commitment to the public? To put the issue in perspective; what would the financial services subsidiary of General Motors, GMAC, do to a customer who stopped making monthly payments with twenty thousand Dollars in debt? How long would GMAC wait until reposing the auto? The customer may be given some time, but eventually the car would be repossessed. The US Government is not in the business of manufacturing automobiles. If GM is unable to to find capital or debt on the free market, it should be liquidated. In a healthy free market, some companies fail, their useful parts are reorganized, and the sector consolidates or takes a new direction. Creditors and shareholders may loose money, but that was a risk that they knowingly took upon lending and investing in the company. Let bad management pay its price. Perhaps other firms or entrepreneurs will be able to turn some of GM’s business lines towards profitability. Let he genius engineers and designers find quality companies to work for.
The auto manufactures may cry that the domino effect of a company such as GM closing down will spread to relating industries. Closing GM will lead to the closing of supporting businesses who are not able to adapt. Should the public support funding for a horse and buggy industry because firms producing accessories such as buggy wheels and decorations? The interlinking of supply chains within the industry and related relationships has significant knock-on effects. For some industries this domino effect is stronger, such as the finance sector. This domino effect is not evident in the auto industry, where consumers have been voting for other firms for years. Let Let GM rest in peace. Let Darwinism do its work.
Anjan Chhetry
Joseph Sherman
World Mediterranean MBA
Euromed-Marseille, France
http://www.euromed-management.com/accueil.aspx