GM and UAW BFF ASAP, On Your Dime

Robert Farago
by Robert Farago

You may recall that General Motors recently circulated a document amongst their paymasters on Capitol Hill “revealing” that they planned to import 17,335 Chinese-made cars by 2011. At the time, we speculated that the leaked “bailout bucks for Chinese trucks” memo was nothing more than a negotiating gambit by GM, designed to bring the United Auto Workers to heel. Play ball and we build here. After all, what else does GM have to offer, other than threats to up stakes and leave? That said, floating a GM in China trial balloon makes the company no friends, uh, anywhere. Especially with their most important stakeholders: customers. Anyway, Bloomberg indicates that the cudgel may have done it duty. GM CEO Fritz Henderson told them (yesterday) that “using U.S. production instead of imports would pivot on whether the UAW can build the vehicles at a cost GM can afford . . . This is a discussion we’re having with the UAW.” And so, today’s Wall Street Journal tells us that “GM Nears Crucial Deal With UAW.” Which could all fall apart.

The main sticking point: using stock in the “new” GM to cover the General’s $15 billion health care trust shortfall. Sensibly enough, the UAW has the sneaking suspicion that the new “good” GM’s fortunes could easily go pear-shaped, leaving them with, well, nothing.

Many worries remain for union officials, say people involved in the discussions. They say that the stock GM proposes to contribute to the VEBA is illiquid and hard to value, posing a big risk for UAW members. The union had initially asked for more from Treasury officials in the negotiations, but was rebuffed.

More? MORE? Does the WSJ mean more stock in a highly speculative venture in a business with a long history of failure (C11 even); or cash money guaranteed by your taxes? I’m thinking cash money. Odds are that the union will find a way to get federal guarantees for their pensions and benefits that lie completely outside of GM’s business operations. Keep your eyes on the fine print.

Robert Farago
Robert Farago

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  • TexN TexN on May 15, 2009

    Actually I think in today's world, our tax dollars are being fed into the wood chipper by the unions, our government, Chrysler & GM, etc.

  • Wsn Wsn on May 15, 2009

    What's wrong with building cars in China? Consumers will get cheaper and better (better as in better for that price) cars. UAW will fight for the benefits of the poor Chinese workers. It's a win-win.

  • Wolfwagen What I never see when they talk about electric trucks is how much do these things weigh and how much does that detract from the cargo-carrying capacity?
  • Wolfwagen I dont know how good the Triton is but if they could get it over here around the $25K - $30K They would probably sell like hotcakes. Make a stripped down version for fleet sales would also help
  • 3SpeedAutomatic You mentioned that Mitsubishi cars had lost their character. Many brands are losing that that element as well. GM is giving up on the ICE Camaro and Dodge on the ICE Challenger. There goes the Bad Boy image. Might as well get your teeth pulled and dentures put in place. Would like to see a few EVOs with cherry bomb exhaust and true 4 cylinder BIG blower turbos; 4 wheel drift capacity is mandatory!!🚗🚗🚗
  • Tassos Here in my overseas summer palace, I filled up my tank twice in May, at 68 and 52 euros (a full 90+ liter tank fillup has taken 130-135 Euros in the past, and I am 23 miles from downtown here, while only 1-2 miles in the US)Still, diesel here is MUCH cheaper than gas. Yesterday, I paid 1,488 a liter while gas was at least 1,899 (regular).Multiply by almost 4 for gallons AND by an additional 1.1 for $.
  • 3SpeedAutomatic IIRC, both China and the EU use a standardized charger connection. About time the US & Canada to follow.Would take some of the anxiety out of an EU purchase and accelerate adoption. 🚗🚗🚗