18
Nov
08

The auto bailout smackdown – GM turns to Germany

General Motors has seen better days...but not for a while now.

General Motors has seen better days...but not for a while now.

We applaud the fact that the proposed $25 billion auto bailout looks to be dead, for now.  But the fact that Chapter 11 is to only way for the former “Big Three” to actually reorganize in a way that could potentially be profitable again in the future, that hasn’t stopped General Motors from going elsewhere, with their hat in hand, begging for “help.”

GM has gone to the German government seeking loan guarantees to help keep their head above water. The fact of the matter is that they need to drown to be able to live on.

By filing for bankruptcy GM will be able to reopen contract negotiations with their suppliers and, more importantly, the UAW.  The UAW doesn’t like this idea because it would mean concessions from them to their employer.  They would seemingly rather completely ruin their employer, driving them out of business, than give one inch of common sense concessions that would benefit everyone in the long-term.  Seems the union contract has turned into a suicide pact.

If these companies were to go the way of the dodo, whom do you think would be out of work longer – the factory worker or the executive?  Which would be harder hit economically in the short-term?  Think about this when Card Check becomes an issue this January…

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1 Response to “The auto bailout smackdown – GM turns to Germany”


  1. 1 Jason
    November 18, 2008 at 9:06 pm

    Today GM suffers a loss of about $2,000 per vehicle sold. On the other hand Toyota whose employees are not part of the UAW earns a profit of about $1,200 per vehicle sold. If GM was able to operate with labor prices near Toyota’s it would have pocketed an additional $29,715,200,000.

    http://nomedals.blogspot.com


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