GM warns UAW and Treasury deals won't be done in time
Not that it should come as a major shock to anyone paying attention over the last few weeks, but in a regulatory filing submitted by General Motors on Tuesday, the beleaguered automaker has admitted that it's unlikely to have acceptable deals negotiated with the either the United Auto Workers or Canadian Auto Workers unions before the previously announced deadline of May 27.
Equally as unsurprising are rumors that GM's plan to begin importing 50,000+ cars from China by 2014 is one of the major stumbling blocks in UAW negotiations. Other sticking points surely include how best to slash the desired $1 billion in annual labor costs that the two parties reportedly targeted and how to fund the Voluntary Employees Beneficiary Association (VEBA) health care trust.
Furthermore, the Detroit Free Press is reporting that CAW union leaders are upset at the way they are being treated in negotiations. A flier passed out to Canadian union workers had this to say:
"Because the Canadian and U.S. governments are planning a joint effort to support GM's restructuring, we now face a dangerous attempt to enforce a 'cookie-cutter' approach on our bargaining. This philosophy is absolutely offensive to us as Canadians."More than ever before, it seems almost a foregone conclusion that GM will file for bankruptcy on June 1st. Hold on tight, this promises to be a wild ride.
[Source: Detroit Free Press | Image: Bill Pugliano/Getty]
Reader Comments (Page 1 of 2)
Sea Urchin 8:45AM (5/21/2009)
In related news, GMAC is getting its second bailout today, 7+ billion dollars.
Wow, all that taxpayer dough just to make sure that we can still buy a Cobalt.
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Alex 8:58AM (5/21/2009)
Great, Government Motors. So does this mean we can't poke fun at the Brits for British-Leyland anymore?
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Sea Urchin 9:04AM (5/21/2009)
We can't even poke fun at North Koreans any more.
John 9:08AM (5/21/2009)
Or Stalin and the Soviet Union....
dsuupr 10:17AM (5/21/2009)
Since toyota got government assistance recently what should they be called?
Sea Urchin 10:27AM (5/21/2009)
@ dsuurp, who cares, it's not my money, Japanese government does not tax me, they can do whatever they want.
Avinash machado 9:10AM (5/21/2009)
That hand in the picture looks huge and tight fisted.
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Kumar 9:19AM (5/21/2009)
I'll give you the benefit of the sarcasm/question doubt. It's a sculpture of boxer Joe Louis's arm and fist in downtown Detroit rock city.
http://adventure.howstuffworks.com/roadside-statues9.htm
Tagg 12:32PM (5/21/2009)
It's hideous too. It belongs in the bottom of the Detroit River or in most of SE Michigans politicians faces! Yeah, that means you Monica Conyers or Kwame Kilpatrick or... The list goes on forever!
Kumar 9:14AM (5/21/2009)
So what's the real deal on the Chinese imports?
Are they subcompacts that couldn't possibly be made in America and sold at a profit AND a competitive price? Or that and a mix of that next sweet looking Buick?
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BobinCobb 9:25AM (5/21/2009)
It takes two weeks to make instant coffee at GM.
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fixitfixitstop 11:28AM (5/21/2009)
I'd vote that up for "comment of the month".
davepaz 9:30AM (5/21/2009)
Re: the comment from the Canadian Union. Lord knows we don't want to offend the Canadians. Perhaps they should just shut down the plants and produce the cars elsewhere leaving you time to mull over your stand while at your new shift lead position at Taco Bell. Get. Over. Your. Self.
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tankd0g 9:55AM (5/21/2009)
Yes, shut down the only profitable factories in the whole company, brilliant.
Carlos 9:35AM (5/21/2009)
Screw the Unions, file for bankrupcy and put in place the changes that are needed to survive. 30 years of mismanagement and bloated unions have killed GM.
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dsuupr 10:15AM (5/21/2009)
Yes, paying walmart wages with no health coverage is a great idea. Then us taxpayers can fund their food stamps and state used health care programs, just like we do with walmart employees.
The reality is, if GM execs made proper decisions during the 70s, 80s and 90s, and the US government did not allow Japan to get away with protectionism, most Americans would still be buying GM products. If we still bought "American" and the economy did not collapse, they wouldn't be in this trouble.
Please stop putting all the blame on a group who has a main goal in making sure execs and stock holders don't walk away with millions/billions, through taking income away from the middle class.
Do I believe the union got more than they should? Sure. But they are not the ONLY reason GM has issues, nor is paying people a living wage evil.
Sea Urchin 10:32AM (5/21/2009)
"Please stop putting all the blame on a group who has a main goal in making sure execs and stock holders don't walk away with millions/billions, through taking income away from the middle class. "
You do realize that most stock holders are people who own GM thru 401K, this is something you and other Obamanites just DO NOT GET.
Some of the "speculators" who forced Chrysler into bankruptcy turned out to be Indianas Teachers Unions............. you didn't see that coming?
So let's see again, screw shareholders (Average Americans) to give money to middle class (Amerage Americans) and give bailouts funded by taxpayer (Average Americans)
Sea Urchin 10:43AM (5/21/2009)
This is an Opinion of WSJ (who are morons for the most part) but here it is
Remember how President Obama blamed Chrysler's bankruptcy filing last month on "a small group of speculators" who turned down Treasury's $2 billion final offer for their $6.9 billion in debt? Well, it turns out that hedge funds and other short sellers weren't the only secured creditors who got a raw deal from Uncle Sam.
Indiana Treasurer Richard Mourdock revealed this week that his state's police and teacher pension funds have lost millions of dollars in the Chrysler "restructuring." Indiana's State Police Fund and Major Moves Construction Fund, which finances roads and bridges, together lost more than $1 million. And the Teacher's Retirement Fund "suffered, at a minimum, a loss of $4.6 million due to the action of the Federal government," reports Mr. Mourdock.
Far from being speculators, these funds represent retired public employees, including cops and teachers. The funds paid a premium to buy "secured" status, only to discover that they were politically outranked by the United Auto Workers in the White House hierarchy.
"In the past, to be 'secured' meant an investor was 'first in line' in the event of a bankruptcy and 'non-secured' creditors would receive value after secured-creditors were paid," Mr. Mourdock says. "In the Chrysler bankruptcy, however, secured creditors received $.29 on the dollar even as non-secured creditors received higher values and ended up with a 55% ownership of the new company, which is fundamentally wrong and a dangerous precedent to the capital markets."
We've worried that the Chrysler sandbagging would discourage bond investment. And, sure enough, Mr. Mourdock says that from now on no funds under his control will invest in the secured debt of "General Motors, other manufacturing companies, or those insurance companies who have or will be receiving bailout funds." Given the recent actions by the feds, he adds, "the risk is too great for any prudent investor to accept."
This isn't political grandstanding. Public investment officials like Mr. Mourdock have a fiduciary duty to seek maximum returns for retirees. The question for all public officials responsible for investing pension money is whether they too should conclude that investing in U.S.-aided companies now carries so much political risk that it violates their legal obligations. Such are the wages of White House disdain for legal contracts.
HCL3 10:57AM (5/21/2009)
In reply to dsuupr.... the state should not be paying for food stamps or health care either
Nellydesign 9:41AM (5/21/2009)
"We want more moneh guy!"
"I'm not your guy, buddy!"
"Well I'm not you buddy, friend!"
"Well I'm not your friend, guy!"
Repeat ad nauseaum.
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