Comments on: American Axle Strike Idles Six GM Plants, More to Follow

By: joebar32

joebar32 — Tue, 04 Mar 2008 21:28:59 +0000

Except the showdown isn’t between GM and anyone. This is a tier 1 supplier that is at odds with THEIR workforce. GM is the first stage in the trickle-up-then-back-down train.

I would hope GM has other suppliers (Dana, etc.) that could start producing axles if necessary. Sure there’d be a major delay, but it could be done. It’s not like those other axle mfg’s are swamped with work from Ford/Dodge/Toyota/Nissan. I would really hope they don’t leave all their eggs in one basket at every level. One has to hope that a Fortune 10 company is smarter than that.

By: Engineer

Engineer — Tue, 04 Mar 2008 19:20:18 +0000

Agreed: GM wins in this one– right until they don’t.
The showdown is HERE. This is a high risk, high stakes game. Could go anywhere from here. The fact that GM is even willing to play such a high risk game says a lot about their current position, IMHO.

RF, I sense the Mother of All GM DW coming on, something along the lines of: GM DW9999: The quiet before the storm…

By: starlightmica (Richard Chen)

starlightmica (Richard Chen) — Tue, 04 Mar 2008 18:39:47 +0000

The domino effect on smaller suppliers, per Automotive News:

Lear Corp., the seating supplier to GM’s light trucks, has laid off 700 employees and idled four plants, spokesman Mel Stephens said. ” Where GM production is down, we are down,” said Stephens. He said another plant is operating at reduced speed and more closings are expected. Other big GM suppliers are expected to follow soon.

By: Bunter1

Bunter1 — Tue, 04 Mar 2008 17:42:18 +0000

The inventory levels do not have to get real low to hurt.
Once they run low on the popular color/option/drivetrain combos sales will spiral down (well, spiral down even faster than Feb.).

This could start hurting at the dealer lots any day, if the strike continues look for nasty March sales news at the General.

And your right RF, these are vehicles they might even sell at a profit, double ouch!

By: Geotpf

Geotpf — Tue, 04 Mar 2008 17:35:44 +0000

Raskolnikov-That’s the “jobs bank”, which comes into play if GM shuts the plant down voluntarily. If the plant is shut down due to a strike at a supplier, I believe the employees get zip (although they can collect unemployment).

By: Raskolnikov

Raskolnikov — Tue, 04 Mar 2008 16:28:47 +0000

Laid off workers used to get close to 95% of their pay. I’m not sure if this changed under the new contract.

Striking workers get $ from the UAW strike fund. It equates to government cheese and rusty well water.

By: yankinwaoz

yankinwaoz — Tue, 04 Mar 2008 16:28:10 +0000

The big losers are going to be the smaller GM suppliers who have to stop production since the plants can’t take delivery

Well that is going to end soon anyhow. Making parts for vehicles that don’t sell won’t last long.

By: joebar32

joebar32 — Tue, 04 Mar 2008 15:26:22 +0000

Exactly. It’s a fine line between benefiting from something like this and losing your ass. But it is a line and saying they “could” go belly up is not exactly a tarot card reading level of ability here. I’ve seen this first hand before and it really is pretty simple. When labor relations go bad, the one who loses the most is the workforce, not the company. Ask all the men and women who work at John Deere foundries. Oh, wait, that’s right they don’t work there anymore because the foundries aren’t open. But somehow Deere is still in business, aren’t they?

By: jurisb

jurisb — Tue, 04 Mar 2008 14:37:53 +0000

When people are starving in Africa and losing weight, they are probably downsizing, not dying. So is GM. Right…..

By: Robert Farago

Robert Farago — Tue, 04 Mar 2008 14:35:33 +0000

Agreed: GM wins in this one– right until they don’t.

By: joebar32

joebar32 — Tue, 04 Mar 2008 14:33:10 +0000

I don’t think laid off employees get full pay from GM anymore. If true, GM is probably making more money right now than if they were working and not selling trucks that they haven’t been selling recently. This it a win win for GM. The big losers are going to be the smaller GM suppliers who have to stop production since the plants can’t take delivery and the workers there and at the GM plants who aren’t getting paid. If those suppliers can’t make parts they won’t be getting paid and assuming their labor costs to sales revenue isn’t as upside down as GM’s is they will truly be losing money.

By: GS650G

GS650G — Tue, 04 Mar 2008 14:28:56 +0000

So after all the posturing and labor VEBA agreements we have a strike and layoffs anyway.

By: Blunozer

Blunozer — Tue, 04 Mar 2008 14:10:23 +0000

I’m not a tin-foil hat wearing guy, but so far this quagmire seems to doing GM more good than harm.

Decreasing the inventory for slow selling SUVs and trucks, without angering the UAW or affecting the supply of in demand Acadias, Enclaves, and Outlooks.

By: gamper

gamper — Tue, 04 Mar 2008 14:06:11 +0000

Does anybody know if the layed-off GM workers are receiving full pay under the new UAW agreement. If not, I would imagine GM could use another month or so of striking at American Axle.

If the workers are getting paid, the benefit to GM is probably pretty slim.