GM and UAW BFF ASAP, On Your Dime

Robert Farago
by Robert Farago

You may recall that General Motors recently circulated a document amongst their paymasters on Capitol Hill “revealing” that they planned to import 17,335 Chinese-made cars by 2011. At the time, we speculated that the leaked “bailout bucks for Chinese trucks” memo was nothing more than a negotiating gambit by GM, designed to bring the United Auto Workers to heel. Play ball and we build here. After all, what else does GM have to offer, other than threats to up stakes and leave? That said, floating a GM in China trial balloon makes the company no friends, uh, anywhere. Especially with their most important stakeholders: customers. Anyway, Bloomberg indicates that the cudgel may have done it duty. GM CEO Fritz Henderson told them (yesterday) that “using U.S. production instead of imports would pivot on whether the UAW can build the vehicles at a cost GM can afford . . . This is a discussion we’re having with the UAW.” And so, today’s Wall Street Journal tells us that “GM Nears Crucial Deal With UAW.” Which could all fall apart.

The main sticking point: using stock in the “new” GM to cover the General’s $15 billion health care trust shortfall. Sensibly enough, the UAW has the sneaking suspicion that the new “good” GM’s fortunes could easily go pear-shaped, leaving them with, well, nothing.

Many worries remain for union officials, say people involved in the discussions. They say that the stock GM proposes to contribute to the VEBA is illiquid and hard to value, posing a big risk for UAW members. The union had initially asked for more from Treasury officials in the negotiations, but was rebuffed.

More? MORE? Does the WSJ mean more stock in a highly speculative venture in a business with a long history of failure (C11 even); or cash money guaranteed by your taxes? I’m thinking cash money. Odds are that the union will find a way to get federal guarantees for their pensions and benefits that lie completely outside of GM’s business operations. Keep your eyes on the fine print.

Robert Farago
Robert Farago

More by Robert Farago

Comments
Join the conversation
2 of 11 comments
  • TexN TexN on May 15, 2009

    Actually I think in today's world, our tax dollars are being fed into the wood chipper by the unions, our government, Chrysler & GM, etc.

  • Wsn Wsn on May 15, 2009

    What's wrong with building cars in China? Consumers will get cheaper and better (better as in better for that price) cars. UAW will fight for the benefits of the poor Chinese workers. It's a win-win.

  • CoastieLenn No idea why, but nothing about a 4Runner excites me post-2004. To me, they're peak "try-hard", even above the Wrangler and Gladiator.
  • AZFelix A well earned anniversary.Can they also attend to the Mach-E?
  • Jalop1991 The intermediate shaft and right front driveshaft may not be fully engaged due to suspected improper assembly by the supplier. Over time, partial engagement can cause damage to the intermediate shaft splines. Damaged shaft splines may result in unintended vehicle movement while in Park if the parking brake is not engagedGee, my Chrysler van automatically engages the parking brake when we put it in Park. Do you mean to tell me that the idjits at Kia, and the idjit buyers, couldn't figure out wanting this in THEIR MOST EXPENSIVE VEHICLE????
  • Dukeisduke I've been waiting to see if they were going to do something special for the 60th Anniversary. I was four years old when the Mustang was introduced. I can remember that one of our neighbors bought a '65 coupe (they were all titled as '65 models, even the '64-1/2 cars), and it's the first one I can remember seeing. In the '90s I knew an older gentleman that owned a '64-1/2 model coupe with the 260 V8.
  • SCE to AUX "...the complete Mustang model lineup to peruse"Will the fake Mustang show up, too?
Next