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UAW agrees to some renegotiation - 12/3/2008 12:13:35 PM

SilverMark

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http://ap.indystar.com/dynamic/stories/A/AUTOS_UAW?SITE=ININS&SECTION=BUSINESS

Will they do enough? Can they do enough?

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RE: UAW agrees to some renegotiation - 12/3/2008 12:21:01 PM

BKSir

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Now this is more like what I'd like to see. The people inside working with the companies to get things fixed, just as it SHOULD be, as opposed to saying "But daddy! She got 25 billion dollars, where's mine?" And good on Ford, let's hope they stick to that instead of saying the same thing after the govt. helps bail out the other two.

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RE: UAW agrees to some renegotiation - 12/3/2008 2:41:16 PM

Irishknight

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It looks like the UAW may finally be realizing their own part in killing the American automobile industry. If they relax things a bit, people may see prices drop on new domestic autos, increasing sales and allowing the big 3 to hire more people to meet the demand again. Just a dream of mine.

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RE: UAW agrees to some renegotiation - 12/3/2008 2:51:22 PM

servantforuse

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As a union member for over 30 years, CWA, not UAW, the retirees should also make a few concessions. Paying a part of the health care costs will not kill them.

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RE: UAW agrees to some renegotiation - 12/3/2008 3:56:38 PM

Vendaval

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Only time will tell the eventual outcome of this situation. At least they have realized that all levels of the auto industry need to be examined, analyzed, re-thought,
re-tooled and re-negotiated.

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RE: UAW agrees to some renegotiation - 12/4/2008 7:53:47 AM

corysub

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Finally, some pragmatism might be slowly seeping into union thinking regarding give-backs. There is absolutely nothing in common between the average blue collar worker in America and the UAW workers. I don't know any company in my area that is spending over $70/worker on salary and benefits as the UAW worker is getting. More than that...the so called "job banks" where people on the line that are not needed just sit in a room playing poker and get 95% of the wage.
Sure, management is to blame as well for not having the vision for the marketplace shown by foreign imports but the present management of these companies pretty much inherited this legacy and seem to be doing a better job.
Congress also is to blame with the pressure on spending money immediaWtely for a green agenda at a time when the consumer is in the throes of a major recession. Who out there is ready to spend $25,000 to $40,000 for a hybrid when your not sure you will have a job next month?? Who really wants to put their kids into one of those cute little Japanese imports that ride like a piece of tin with wheels and would be destroyed if they ever hit a deer. I don't think soccor moms and dads are ready for smaller cars. More fuel efficient for the money great...less pollution...great.... but compact cars that were the rage in the late 1950's..(Mitt Romney's father was the innoator) faded since Americans like their big cars. We travel hundreds of miles to visit friends and need the ride of a bigger car for families.

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RE: UAW agrees to some renegotiation - 12/4/2008 8:26:52 AM

Mercnbeth

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This is the "big concession"?

quote:

United Auto Workers President Ron Gettelfinger said the union will suspend the jobs bank, in which laid-off workers are paid up to 95 percent of their salaries while not working, but he did not give specifics or a timetable of when the program will end.

The most amusing part is that there is no consideration of terminating the program where people get to sit on their ass for 95% pay - they just want to "suspend" it for a while. The other concession is to delay, not eliminate or reduce the amount, of payments due to the union from the auto makers to fund the pensions. Lets look at each of these in the event of the manufacturer's bankruptcy.

The sit around for 95% pay - GONE
The payment to the Union pension - In litigation for decades as the assets are sold off while the lawyers feeding frenzy of fees eat up most of the net worth. Best case scenario is that the funding is pennies on the dollar if paid anything. More than likely - taxpayers money will fund it if its funded at all.

Their "renegotiation" is a fraud, it doesn't add $1 of room or provide any meaningful concession to address current reality.

Total hourly cost, including all benefits, for a GM, Ford, Chrysler worker - $73.08; Toyoto's cost is 1/3 less.

quote:

Here are three key values in a chart shown Monday at Carpe Diem (HT Small Dead Animals):

Total Compensation Per Hour, 2007-2008 (includes wages and all benefits):
Big Three automakers — $73.08
Toyota — $48.00
All workers — $28.48

Source: http://newsbusters.org/blogs/tom-blumer/2008/11/13/aps-auto-bailout-coverage-nearly-ignores-excessive-labor-costs-uaws-conc

The union will be negotiating in good faith if/when they bring cost in line with the competition. Buying into the solution, with the concession being that they are rewarded if/when the bottom line improves. Anything short of that, is posturing bullshit.

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RE: UAW agrees to some renegotiation - 12/4/2008 9:44:15 AM

housesub4you

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Which is why they should go to court instead of the taxpayer footing the bill for them to "suspend" something till they get the money then it's no longer "suspended"

Let 1 of the big 3 shut down and watch the unions fall into line and dump some of those crazy ass job perks. I wish I got paid for sitting on my ass, No I would just get fired.

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RE: UAW agrees to some renegotiation - 12/4/2008 9:48:41 AM

celticlord2112

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quote:

Will they do enough? Can they do enough?

Can they? Of course they can. All it takes is the UAW leadership to tell their rank and file "you can earn less and most of you get to keep your jobs, or you can all be unemployed for a very very VERY long time." That is the choice facing the UAW. In reality, there is damn little to negotiate. The labor rates HAVE to come down, the healthcare costs HAVE to come down, the job protections and "jobs bank" HAVE to end--if these things do not happen the Big Three are doomed. The UAW either buys into the notion of making the Big Three competitive or it buys into the notion of its members being unemployed, every single one of them.

Will they? Doubtful.

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RE: UAW agrees to some renegotiation - 12/4/2008 10:46:43 AM

housesub4you

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Well just listening to the talks with the panel and it seems the only ones taking a hit are the workers.

Not the lenders, not the shareholders, not the exec's, What I heard is this in layman's terms, \

Give us the money and we will tell you later what the plan is, let's say sometime around March we will let you know what we plan to do.

Well you have to give the credit from learning from the WS bailout, no conditions are better than some

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RE: UAW agrees to some renegotiation - 12/4/2008 11:07:49 AM

celticlord2112

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quote:

Not the lenders, not the shareholders, not the exec's, What I heard is this in layman's terms

Lenders lent presumably in good faith. They have a right to expect repayment of the debt. Reality is at least some debt will have to be forgiven (comes down to similar deal the UAW is facing--take something or nothing).

Shareholders take it in the pocketbook every time the stock goes down. I doubt too many people are making money on GM shares right now (unless they short-sold to the max). They're already getting the hit--and worse than the workers ever will.

Execs....can't argue there. The ones who somehow escape firing and flogging need to work for damn little.

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RE: UAW agrees to some renegotiation - 12/4/2008 11:29:52 AM

slvemike4u

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Lenders lent presumably in good faith......no argument with that statement CL,though I did note the curious absence of mention that the unions negotiated in presumably good faith.Now I am not suggesting some accomodations must be made,but the presumption of good faith should extend to the UAW should it not.

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RE: UAW agrees to some renegotiation - 12/4/2008 11:48:00 AM

celticlord2112

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quote:

ORIGINAL: slvemike4u

Lenders lent presumably in good faith......no argument with that statement CL,though I did note the curious absence of mention that the unions negotiated in presumably good faith.Now I am not suggesting some accomodations must be made,but the presumption of good faith should extend to the UAW should it not.

Sure, presume away. While we're at it, let's presume the CEOs also acted in good faith. Now, what difference does it make? (Hint, the correct answer is "None")

The challenge before the UAW is how to keep their people employed and drawing paychecks. If they sit down at the bargaining table with anything other agenda this time around they are NOT bargaining in good faith, good conscience, or even good reason. Nor are they acting in the best interest of their constituency, the workers themselves (who, I am sure, would really like something besides an unemployment check in their Christmas stocking).

If the lenders do not stand a reasonable expectation of repayment, their solution is simple--don't lend any more. That would pretty much kill off all three automakers, and all those UAW jobs, so even the UAW has a vested interest in getting the lenders paid back.

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RE: UAW agrees to some renegotiation - 12/4/2008 11:53:19 AM

Mercnbeth

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quote:

ORIGINAL: housesub4you

Well just listening to the talks with the panel and it seems the only ones taking a hit are the workers.

Not the lenders, not the shareholders, not the exec's,

Lenders: Non earning asset or loans in default are disqualified from being included in the borrowing base. A Billion dollar non-performing loan is a significant "hit".

Shareholders: December 2007 value: $29.44/share December 2008 value: $1.87/share. A 82.56% reduction in the value of the stock is not a "hit"? How do you define "hit"? Source: http://finance.yahoo.com/q/ks?s=gm

Exec Pay: Agreed to salary $1/year. 2007/8 salary $8.5 Million + Bonuses Source: http://www.forbes.com/static/pvp2005/LIRSOX2.html

UAW: "United Auto Workers President Ron Gettelfinger said the union will suspend the jobs bank, in which laid-off workers are paid up to 95 percent of their salaries while not working, but he did not give specifics or a timetable of when the program will end." Source: http://ap.indystar.com/dynamic/stories/A/AUTOS_UAW?SITE=ININS&SECTION=BUSINESS

"Good faith" or 'good intent'; discussing either is a waste of time in the face of pragmatic realty. Although I'm sure they'll be used by both sides as a distraction included in the soliloquies given over the corpse of the US auto industry.

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RE: UAW agrees to some renegotiation - 12/4/2008 12:18:46 PM

slvemike4u

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CL lenders might also be required to renegotiate the terms of said loans or face the real possibility of Chapter 7(there is slim to none chance of reorganization under chapter 11).Now if they don't act in their best interest here ie work with the big three,as the unions are required too....than neither are they using "good reason".Again I will reiterate the UAW needs to take a pragmatic long term view here,as do the lenders ,suppliers,management and yes even Congress if the American Auto Industry is to survive.Something most everyone agrees is necessary and prudent given the morbid state of the economy.

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RE: UAW agrees to some renegotiation - 12/4/2008 12:28:21 PM

celticlord2112

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quote:

ORIGINAL: slvemike4u

CL lenders might also be required to renegotiate the terms of said loans or face the real possibility of Chapter 7(there is slim to none chance of reorganization under chapter 11).Now if they don't act in their best interest here ie work with the big three,as the unions are required too....than neither are they using "good reason".Again I will reiterate the UAW needs to take a pragmatic long term view here,as do the lenders ,suppliers,management and yes even Congress if the American Auto Industry is to survive.Something most everyone agrees is necessary and prudent given the morbid state of the economy.

What makes you certain that it is in a lender's best interest to "work with" the big three? Yes, lenders want to be repaid, and to get anything back will require a certain accommodation on their part, but if there is not a strong chance of repayment of future borrowings, how can we say the lenders' "best interest" isn't to just write off the debt, force the automakers into liquidation, and pick apart the corpses?

Ultimately, the UAW's operational objective is to keep UAW members employed going forward. Automakers' creditors do not necessarily have an operational objective of lending money to them going forward, merely a repayment of what has already been borrowed.

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RE: UAW agrees to some renegotiation - 12/4/2008 1:27:27 PM

SilverMark

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I am as concerned for the Big 3 as the next person especially when it could have such a devastating effect on our economy however, Chrysler in particular I have an issue with. Take a look at the holdings of the parent company: http://www.cerberuscapital.com/index.html
If this investment group can invest in all these corporations, why is it that they wouldn't bail Chrysler out themselves? I wonder just how heavily leveraged they are? If they are an investment house as opposed to an automaker would they qualify for treasury funds from the existing TARP? If they wouldn't qualify for those funds why would they qualify for funding as an automaker?
Perhaps instead of the Big 3 we should talk about the Big 2 and let the investors of Cerberus take care of Chrysler.

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RE: UAW agrees to some renegotiation - 12/4/2008 1:39:48 PM

housesub4you

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quote:

ORIGINAL: celticlord2112

Lenders lent presumably in good faith. They have a right to expect repayment of the debt. Reality is at least some debt will have to be forgiven (comes down to similar deal the UAW is facing--take something or nothing).

Then why are we bailing out WS and the mortage banks, if they lent money in good faith then let them take the hit.

I find it interesting how quick people are to spend the tax payers money and let people off the hook, everyone connected to the auto industry is part of the problem. If you're a bank and you are lending money to company losing money then why you should get bailed out by the tax payers.

If you're stockholder and you vote in support of the people who take huge bonuses while losing money for years, then you should lose money on your stocks

It seems the only people to blame reading some of this is the UAW, well, the Big 3 signed on the dotted line and the banks who lent money knew the contracts and the shareholders voted yes,

So I don't think the money should be used like they where saying today to pay shareholders and banks charging 12-15 % interest on loans.

No wonder they don;t want to go to court, the court would make everybody come to the table and anity up

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RE: UAW agrees to some renegotiation - 12/4/2008 1:40:57 PM

celticlord2112

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quote:

Then why are we bailing out WS and the mortage banks, if they lent money in good faith then let them take the hit.

Excellent question. I've been asking myself the same thing.

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RE: UAW agrees to some renegotiation - 12/4/2008 3:36:41 PM

Mercnbeth

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Here's where $50 Million went.

Based upon some of the names getting graft money; in any other industry except politics voting yes for the 'bail-out' would be considered accepting a kick-back or bribe. But no....lets just keep electing the status quo back to Congress.

quote:

(CBS) As Congress mulls over a bailout for U.S. automakers, some may be thinking about more than jobs and the economy.

The auto industry spent nearly $50 million lobbying Congress in the first nine months of this year.

And people tied to the auto industry gave another $15 million in campaign contributions, CBS News investigative correspondent Sharyl Attkisson reports.

It's not surprising that a lot of that money went to members of Congress from Michigan, where the auto industry is the biggest employer and politicians are passionate advocates for their constituents.

Take Sen. Carl Levin, who received $438,304 from the automotive industry. And in the House, Rep. Joe Knollenberg received $879,327. Rep. John Dingell got nearly a million from the industry. All have enjoyed generous support from the auto industry over their careers, with GM and Ford as their two top contributors. All support a bailout.

But nobody's been a bigger advocate for Motor City interests than Dingell. And for him, the stakes aren't just political, they're personal. Source: http://www.cbsnews.com/stories/2008/12/03/cbsnews_investigates/main4646424.shtml