Bailout Watch 248: Pulling Together

bailout watch 248 pulling together

There’s a small rash of stories spreading through the media with a single common thread: everyone’s going to pull together to get GM through until the government picks up the tab. So, is it feel-good holiday rumormongering, or something more? Let’s take a look. The first story comes from Automotive News [sub], and it quotes GM purchasing boss Bo Anderson as saying suppliers aren’t demanding cash. And why would they? It’s not like things are tight right now. “Our suppliers are behind us,”Anderson tells AN, “We keep our terms of payments. They are contractual, something we negotiate with suppliers, and we think it is important to be a prompt payer. We are doing our best to hold the current terms.” Doth the gentelman protest too much? “It is very important to be very transparent and be open about the changes we see in the workplace with production schedules, product delay and any product changeovers,” says Anderson, while acknowledging that supplier CEOs face difficult conversations with their nervous directors, who worry about GM’s ability to pay as it suffers a liquidity squeeze and delays in getting financial aid from Congress. But anyone who has watched supplier after supplier go bankrupt over the past several years knows that suppliers have little choice in these matters. The UAW though?

Another Automotive News [sub] story reports that the UAW is “facing deeper cuts to clinch auto rescue.” And the VEBA healthcare fund could be on the line. Crowe Horwath analyst Erich Merkle notes that “(Detroit automakers) have got to make some adjustments to the VEBA, because there is no way they can afford to make those payments.” Fitch Ratings managing director Mark Oline adds that “After the federal government, (VEBA) is a most likely source of liquidity to help tide them over.” There’s even talk of the UAW giving up its job bank programs. You know, for real this time. “I don’t think the UAW is going to be a challenge here,” IHS Global Insight analyst Aaron Bragman said. “You will see them come back with even more concessions, because they realize the alternative is that they are all out of a job.” Of course there are challenges. GM has already deferred $1.7b in VEBA payments and the fact the union and the automakers have had a federal court certify the VEBA agreement could make changes tough to implement. But the desperation of the situation seems to be setting in, and it seems the UAW could be ready to pull for the home team. Of course, the bailout is the glue that holds this all together. If it is denied, it’s back to the warpath.

Join the conversation
 1 comment
  • 928sport 928sport on Nov 27, 2008

    They will get there bailout sooner then later, this new dog and pony show that is coming will push it over the edge.You can bet in three or four months they will be back to suck some more life out of the tax payer and there is not a thing we are going to do about it except bitch!!

  • FreedMike “Tanner Lee Hellbusch” is the best perp name I’ve heard in some time. Props to the police for this!
  • ToolGuy Road and Track are two different things. I will not track any of my road cars, and almost any single thing I might do to make a road car better on the track would tend to make it worse on the road. If I had a billion dollars today, I would buy and track an Ariel Atom (1,349 lbs), but never drive it on the road.[actually - Road, Track and Truck are *three* different things, but I digress]Will I miss the sound of lunatics driving performance ICE Mopars irresponsibly on public roads? No I will not. (Will the torque of performance Stellantis EVs get the maniacs in trouble even more easily? Probably.)Will I miss doing oil changes and pumping smelly gasoline? Nope.
  • FreedMike “…and that means you must also select the 10-speed automatic transmission. “If it’s the same 10 speed from the Mustang, avoid it like scabies.
  • 6-speed Pomodoro I'm not opposed to an EV, but I have no idea what one would have to have or look like to compel me to buy one. The three things I look for in a car are seat comfort, sound, and a stick shift. I generally think I'm waiting for at least the generation after the next generation for engineers to figure out what makes EVs worth driving. That puts us around 2030, so why worry about it? But who knows. Maybe Honda will ace the compact sports EV with an s600amp and pull me in.
  • THX1136 Agree with SCE, the cost alone puts me out of the equation. Would I like an EV Charger, sure but see previous sentence.