Coverage of GM’s problem is a double edged sword, on the one hand it’s necessary but on the
other it’s like beating a dead dog. I digress. Details are being worked on for
GM’s goal of reducing healthcare costs.
The UAW folks are not happy about this, but I believe they are smart people who know that its coming. It does seem that
the proposed cuts will not greatly reduce GM’s expenses, however. It may be more fruitful to pursue other kinds of
cuts. According to analyst reports, the cuts will save about $300 million if applied to active employees. There could
be greater savings if retirees are asked to make cuts, but again that is like taking back a promise. These are tough
decisions for GM and the UAW. Word is that GM may force the concessions if the UAW does not go along willingly. June 30th look
likes the drop dead date.
There is a little silver lining to all this, about half of GM’s current hourly workforce will be eligible to retire in
5 years. What a perfect opportunity, and GM needs to prepare. With union workers heading out the door, GM can look to
eliminate continued UAW growth by building plants outside of the union’s influence. That does mean it will take a long
time for GM to really turn around its financial side of its troubles. However, whoever thought GM would recover in a
few months is dreaming anyway.