Comments on: No End in Sight for UAW/American Axle Strike

By: Landcrusher

Landcrusher — Tue, 18 Mar 2008 17:29:56 +0000

Does GM have to pay UAW workers not to work while their brothers are on strike at AA? That can’t be a legal situation.

By: jolo

jolo — Tue, 18 Mar 2008 14:31:20 +0000

GS650G asks:

Why would anyone buy a vehicle built with parts from unhappy workers?

Great question that I always ask people when they think about buying any of the Dom2.8 vehicles. Most people will think long and hard about it and most switch to another brand.

By: GS650G

GS650G — Tue, 18 Mar 2008 14:14:47 +0000

Why would anyone buy a vehicle built with parts from unhappy workers?

By: guyincognito

guyincognito — Tue, 18 Mar 2008 13:47:38 +0000

I wonder if the UAW has done the cost analysis of the hit to the value of their VEBA fund caused by the sinking of GM stock value due to this strike vs the possible increase (or lack of decrease) in membership dues that can be gained by this strike.

By: Orian

Orian — Tue, 18 Mar 2008 13:09:07 +0000

I’m wondering if GM isn’t letting this one go as long as they can to see if any of their suppliers go belly up so they can shift production of the parts to China.

By: Banned User

Banned User — Tue, 18 Mar 2008 13:01:25 +0000

You gotta wonder what is the strategy?
Is AA gonna take an extended strike and then capitulate after pocketing what they saved from the strike or is Dauche going to fight this out to the bitter end, which could be the end of GM. And then plan 3 would be to begin producing the parts elseware. With the current economic downturn, the inability of the Big 2.8 to be successful when times were good and now a crippling strike that will strain the already weak supplier system I just see no possibility for survival of the Big 2.8. The TTAC Death Watch series will prove true.

By: Cammy Corrigan

Cammy Corrigan — Tue, 18 Mar 2008 12:00:12 +0000

I read on Detnews.com that GM’s stock price is falling because of this strike. The fact that the end nowhere to be seen, cannot be good news for GM.

I’m not quite sure when this strike stops eating into GM’s surplus inventory and starts becoming a cash burn, but it can’t be that far away……can it?

By: holydonut

holydonut — Tue, 18 Mar 2008 11:40:10 +0000

Just an FYI – automakers juice their bottom line when they ship a completed vehicle to a dealer. The actual retail sale of that vehicle to a customer ultimately motivates dealers to order more cars. But, retail sales do not directly impact GM’s car-operations profitability.

GMAC still makes money when customers finance through them – but GM’s car operations should not (I hope) rely on GMAC to keep the car side going.

Large inventory levels in the dealer channel force higher incentives on those trapped vehicles. Higher incentives obviously reduce GM’s profitability.

The burden of the strike is mostly that GM is unable to earn cash within the process of shipping cars to dealers. They still need to pay for employees, continue investment, and spend loads on other overhead. And suppliers also rely on the constant flow of parts to GM for their cash flow. A long strike in conjunction with credit downgrades would manifest itself in failures when the cash well goes dry.