Ford and GM Threaten to Walk Away From US; Union May Strike. Or Not.

Robert Farago
by Robert Farago

It's a media truism: when the principles are tight-lipped about a big story, speculate away! Case in point: The UK's Observer quotes unnamed inside sources who say Ford and General Motors have threatened to "leave Detroit and take their car manufacturing operations overseas" if unions "don't agree to a massive pay cut for hourly paid workers." First, why would GM and Ford spend hundreds of millions on relocation expenses just to make a point to the UAW? Second, no one expects a massive pay cut for the union's hourly workers. Third, Ford and GM have already moved large chunks of their car manufacturing operations overseas. To suggest that Ford and GM could/would go nuclear– shutting down mission critical U.S. operations in response to union intransigence– is just plain silly (even for a New York City-based reporter). Building on this imaginary doomsday scenario, BloggingStocks goes one step further. They postulate that the UAW will strike if they can't get a sufficiently large union-controlled health care fund from GM and Ford (of Chrysler we hear nothing). Sorry guys, but it's the bus you don't see that kills you.

Robert Farago
Robert Farago

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  • Mikey Mikey on Aug 27, 2007

    Never have I seen contract talks so tight lipped.I think that both sides have made a silence pact. So it doesn't suprise me that the media would grasp at anything. Its not like were making Barbie dolls,boys and girls.The modern auto, unlike whats being built in the 3rd world is an encredibly complex piece of machinery.In the Oshawa plants alone 3200+ cars and trucks a day roll off the line. Never mind the stagering costs of moving,how about the logistics? It's anybodys guess at whats going on between the UAW and Ford/ GM/Chrysler.I believe that almost anything could come out of talks.That report would be better suited to the national equirer.

  • Blunozer Blunozer on Aug 27, 2007

    I wouldn't be surprised if the reason behind the silence is because nothing is actually being said. I think they are all just staring each other down like Tuco, Angel Eyes, and Blondie standing off at the end of The Good, The Bad, and The Ugly.

  • Redbarchetta Redbarchetta on Aug 27, 2007

    Haven't they already started down this path? The way they have been moving stuff this could be true in 5-10-15 years.

  • Naif Naif on Aug 27, 2007

    would the big boys just up and leave? no. they would however start packing and moving. first the lower profit stuff and then on up the line. actually they have been moving for some time and not just production sites. look what comes from Australia, Germany, India and elsewhere. what the companies save on wages etc for all phases of auto production from design to going out the back door would be recouped in a short time. they would still be charging the same price for a car that was a whole lot cheaper to produce. the big shots would remain here though.