• Jan 6, 2009
To ensure long-term viability, General Motors has pledged an arm and a leg (and maybe an eye) to satisfy conditions imposed by the federal government after the automaker received billions in taxpayer-funded loans. In addition to reducing debt and condensing the number and type of vehicles it produces, GM has promised to revamp labor contracts -- not an easy task. With that in mind, GM is entering historic talks and negotiations this week with the United Auto Workers, bondholders, dealers and others to help transform the automaker into a lean and profitable company.
It's a monumental task, but GM needs to undertake serious financial concessions to implement their restructuring plans. These include eliminating up to 31,000 jobs, closing down nine assembly plants, shutting 1,750 dealerships, and possibly eliminating the Saturn brand. Of course, they also have to renegotiate the 2007 UAW labor contract with GM. The UAW has resisted wage and benefit cuts, but without union compromise GM could be forced to file bankruptcy... something none of the players wants to see happen.

[Source: Detroit News]


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  • 21 Comments
      • 6 Years Ago
      I think this clears up many of the problems with the UAW.
      http://www.clickondetroit.com/video/15908257/index.html
      • 6 Years Ago
      1 word: "...whoa..."
      So are they saying they should cut an additional 31k uaw workers and close 9 more plants than what has already been scheduled and planned? That seems like a lot. That would bring their workforce down to what's in line with Ford...
      I think all this talk about renegotiating the 2007 talks is too much. Salaries and current benefits are already close to inline with non unions. The whole purpose of joining a union is to be able to demand better worklife. Why pay union dues if everybody makes the same amount and has the same benefits?
      The only thing i think should be changed is Medical benefits and Pensions. Those should be modified to be 401k + company contributions higher patient copays.
      I dont know what the current UAW retirement age is too, but if a UAW worker can join at 20 and retire at 50, then I think they should raise the retirement age too.
        • 6 Years Ago
        quote from snp: -
        "The only thing i think should be changed is Medical benefits and Pensions. Those should be modified to be 401k + company contributions higher patient copays." -

        That's basically exactly what GM is proposing I imagine. For instance, the 2007 renegotiation already mandated 401k's with new employees getting them first.

        The problem is, that new contract isn't going to begin until 2011. New workers are held to the terms of the new contract, but when was the last time you heard of GM hiring new workers? So, in other words, that new contract doesn't mean anything right now.

        My guess is, they want to negotiate for an earlier start date for the new contract than 2011. Plus, they will probably ask for more concessions on benefits as well.

        Going back to another comment of yours and one that was touched on by Scott, it's already a well-know fact that UAW workers make pretty close to what non-union autoworkers make(it's less than a $2/hr difference in wages, not total compensation). So, that's not where the cuts are going to be made, it's in the benefits and healthcare that are costing the Big 3 so much more than their non-union counterparts.

        I still think it is funny that the UAW claims to push for higher wages and better benefits while at the same time mentioning that they won't agree to more cuts because their workers already make almost the same as their non-union counterparts. So, what exactly are the union workers paying for??

        Honestly, the benefits are no longer as extravagent as they once were, for instance no more guaranteed pension plans etc. I'll admit that a large part of the benefits cost are legacy payments to cover workers who no longer work for GM and as those retirees die off(crude, but that's the truth, they get lifetime benefits and pensions) those costs will come down. That can still be 20-30 years down the road though. Therefore, other cuts need to be made in order to make the company more competitive and viable in a World where the Big 3 no longer have a monopoly over the US auto market as they once did.
        • 6 Years Ago
        "Why pay union dues if everybody makes the same amount and has the same benefits?"

        That about says it all. The UAW now has to defend their worth, when the golden goose can't lay any eggs. If they can't deliver higher wages (and very soon, they won't), then why allow them to skim your paycheck?

        The next question: how long for the average line worker to figure this out? Tick-tock.......
      • 6 Years Ago
      Unless they abolish the UAW, I don't see this doing anything to fix the problem.


      http://laborpains.org/index.php/2008/12/12/22-pounds-uaw-rules-and-regulations/
      FORDMAN
      • 6 Years Ago
      So all of this money going to UAW retirees. This is money that could've been spent on better quality parts that are going into their cars. It's a GM revolution.
        • 6 Years Ago
        @FORDMAN
        Remind anyone of anything else....say...social security?

        I don't think GM is alone in underfunding benefits, as many are finding out when the company they have worked for goes out of business, leaving them with no pension/benefits.

        It's almost inevitable that at least one of the 3 will file for bankrupcty, if only to shirk the pensions and start a new.

        So will that Kirkorkian (sp?) dude buy up the Chrysler parts now that he sold off his GM/GMAC stake?
      • 6 Years Ago
      The union employees do not deserve better pay than non union members just b/c they pay dues each month, thats a bunch of crap.

      The UAW is what is sucking the life out of the Big 3 anyway, a bunch of over paid(over compensated) whiners.
      • 6 Years Ago
      Boring. Where's the imagination?

      here's an interesting thought. I wish I'd thought of it myself.

      "Common sense demands that the workers accept that a third or more of their rigid wages and benefits should change its form... but not necessarily go away! It is time for labor and pensioners to accept the blatantly obvious, that their enforceable obligations make them the top creditors of Ford, GM and Chrysler.

      For once George W. Bush said something right. Treat this as a bankruptcy! With present shareholders and management dropping to the bottom of priority, that would leave the workers and pensioners - effectively - the owners of the Big Three. "

      How's that for thinking big? You can check out the whole post at http://davidbrin.blogspot.com/2008/12/8-micro-suggestions-about-economic.html

      • 6 Years Ago
      They should have bought there way out of union contracts long ago. The union had its place long ago, now it is just a leech.
      • 6 Years Ago
      So, no one's going to say it? Fine, I will, "@#%& the UAW".
        • 6 Years Ago
        I'm with you. The union has forced domestic makers to their knees. "Gently fingered" and his henchmen have to go!
      • 6 Years Ago
      if an employee has 36 year of service with GM and is 58 years old will the employee be able to get unemployment or will GM force this employee to take retirement?
      • 6 Years Ago
      It's amazing GM is still alive with over $50billion in medicare/social security liabilities, "job bank" programs (where people show to play crossword puzzles), etc

      don't GM print more pay checks each month for people not even working? just amazing...
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