UAW and GM: Strange Bedfellows
October 3rd, 2007 7:21 AM
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If the UAW ratifies the new GM contract and agrees to the VEBA, they could end up as GM's biggest shareholder. Based on information about the VEBA provided by the UAW, Financial Times estimates GM's contribution will include a $4.4b note that can be converted into GM stock. At current rates, that would buy a 17 percent equity stake in GM. What would happen then is anyone's guess, but it sounds like a huge conflict of interest in the making. Would the UAW be as willing to take actions against GM in support of their membership if they knew it could cause the value of the stock to drop and hurt their members? Will the UAW try to exert influence via shareholder meetings in lieu of contract negotiations? Fun!
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Didn't United Airlines have a big employee ownership system before they went bankrupt? I seem to recall they were unionized to the gills as well. Someone remind me again what highly unionized industry is the good one.
I think it was a huge mistake by the UAW to accept two tier wages, a very slippery slope for them as well as being too friendly with the GM Company
What i think is funny is the anti union clique has lost its dog to kick. The contract gives the company everything they wanted (needed??) and more. We'll see if the condition of the company really was the big bad greedy unions fault or not. My guess is we'll find the companies problems have more to do with product design and development than a retirees promised health care.