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What happens when the big 3 are gone?


volfrahm

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Here is an article that the UAW sympathizers should love. This comes from the Center for American Progress which is as far left as they come:

http://www.americanprogress.org/issues/2008/12/uaw_concessions.html

I honestly think the debate about 'whether' there should be a auto company bailout or not is really pointless (and who is to blame). With the dems in charge of both houses of congress and Obama coming into office in a month there is no question that the auto companies will get bailed out. The UAW is a big dem contributor and there is no way the dems will let a bankruptcy judge determine the UAW's fate. The part I'm watching is what will happen when the bailout does take place. Even though the article from the Center for American Progress discusses the Unions and how they are blameless for the big three's problems, the operative bit in the article is this bit

Clearly, action is needed. The collapse of the U.S. auto industry would reduce tax revenue by $150 billion per year, according to one estimate, and it would put 3 million American jobs at risk in an economy that has already shed nearly 2 million jobs this year. These severe consequences, in addition to the national security concerns of losing our manufacturing base, the potential to transform the U.S. auto industry into an alternative energy leader, and the need to be consistent and not apply a double standard to the auto industry and the financial sector, make government intervention—on the right terms—the right thing to do.

Emphasis added by me.

A small and innocuous statement in that article perhaps? Let's look to these two articles to see how to interpret that code

http://www.realclearpolitics.com/articles/2008/11/commandeconomy_bailout_would_h.html

The point of the Democratic bailout is to protect the unions by preventing this kind of restructuring. Which will guarantee the continued failure of these companies, but now they will burn tens of billions of taxpayer dollars. It's the ultimate in lemon socialism.

Democrats are suggesting, however, an even more ambitious reason to nationalize. Once the government owns Detroit, it can remake it. The euphemism here is "retool" Detroit to make cars for the coming green economy.

Liberals have always wanted the auto companies to produce the kind of cars they insist everyone should drive: small, light, green and cute. Now they will have the power to do it.

In World War II, government had the auto companies turning out tanks. Now they would be made to turn out hybrids. The difference is that, in the middle of a world war, tanks have a buyer. Will hybrids? One of the reasons Detroit is in such difficulty is that consumers have been resisting the smaller, less powerful, less safe cars forced on the industry by fuel-efficiency mandates. Now Detroit would be forced to make even more of them.

If you think we have economic troubles today, consider the effects of nationalizing an industry of this size, but now run by bureaucrats issuing production quotas to fit five-year plans to meet politically mandated fuel-efficiency standards -- to lift us to the sunny uplands of the coming green utopia.

This article also discusses the issue of what the dems would like to do with the 'Auto bailout'

http://www.heritage.org/Research/Economy/wm2164.cfm

Would Washington do a better job running the automobile industry than Detroit would? Taxpayers may be about to find out. Under legislation proposed yesterday by congressional leaders, Detroit-based automakers would be offered some $15 billion in federal low-interest loans. In return, they would be subject to unprecedented federal controls on how they run their businesses.

He then follows that up later with this bit

Other provisions are unique to this bailout, and unusual in their specificity. To no one's surprise, the ownership of corporate jets is banned. More worrisome, the carmakers are required to consider conversion of SUV manufacturing plants to mass transit vehicle production. The bill would also limit the carmakers' ability to fight further regulation, banning them from pursuing court challenges to state laws regarding greenhouse gas emissions.

For the record I'm all for the big three filing for chapter 11. It isn't going to happen because the UAW has too much political clout with the democrats in charge and the CEOs don't want to get canned as they doubtless would be if the big three file for Chapter 11.

This article is a counterpoint to the arguments against filing for Chapter 11, not that it will matter one way or another. This isn't about what's sensible or logical. This is about politics influence, and constituencies. If the Republicans still controlled congress this debate wouldn't even be happening. The Big Three wouldn't have even bothered to fly to Washington to plead their case and GM would have filed for Chapter 11 by now.

http://www.heritage.org/Research/Economy/wm2165.cfm

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I just wanted to expand a bit on the previous post. Here is another article that touches on what might happen when this bailout takes place

http://www.realclearpolitics.com/articles/2008/11/the_washington_stock_market.html

I just want to highlight this bit right here

Even more egregious will be the directives to a nationalized Detroit. Sen. Charles Schumer, the noted automotive engineer, declared "unacceptable" last week "a business model based on gas." Instead, "We need a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car."

The Chevy Volt, for example? It has huge remaining technological hurdles, gets 40 miles on a charge and will sell for about $40,000, necessitating a $7,500 outright government subsidy. Who but the rich and politically correct will choose that over a $12,000 gas-powered Hyundai? The new Detroit churning out Schumer-mobiles will make the steel mills of the Soviet Union look the model of efficiency.

The ruling Democrats have a choice: Rescue this economy to return it to market control. Or use this crisis to seize the commanding heights of the economy for the greater social good. Note: The latter has already been tried. The results are filed under "History, ash heap of."

This article here from the Cato institute is a little over the top, but basically talks about what an elimination of competition would mean for the auto industry. In other words, if, in an extreme case, you had the big three all being run by congress and you could somehow make the competition a little less ... ummm ... competitive then you have the potential to do all kinds of ideologically driven stuff.

http://www.cato.org/pub_display.php?pub_id=9834

If the auto industry had gotten a similarly sweet deal (double the revenue, no improvement required) Chevrolet would still be able to sell 1971 Impalas today, at a whopping $43,479! Due to the rigors of competition, however, they've been forced to innovate and keep prices down. They've had to improve mileage and mechanicals, refine fit and finish, add airbags and On-Star, and they still can't get away with charging more than $21,975 for their vastly improved 2008 model.

Yeah, it's a little over the top but make no mistake about it; big labor and the democratic party are not 'free traders'. That camp believes in protectionism, tariffs, etc as a means of keeping domestic companies solvent (and pumping out 'green' vehicles). So how do you make your competition a little less competitive? Here is what I am personally looking at. First, you can raise tariffs on imported autos. The problem with that is many foreign automakers have plants in the US. An unfortunate addendum to that as far as the UAW is concerned is that these foreign auto makers employ non union workers. Auto workers who aren't members of the UAW. The frustrating part is that those auto workers don't seem to want to join the UAW either. What to do? Along with the auto company bailout coming in January this little baby is headed to a non unionized foreign owned auto plant near you:

http://www.americanprogress.org/issues/2008/12/efca_brief.html

Unions are good for democracy. They give workers a voice on the job and in politics, and have been essential to the passage of some of the most important legislation of the past 100 years.

The Employee Free Choice Act is democratic and restores previously won rights. The bill would allow workers to join a union through simple majority sign-up or an election—as previous labor law allowed.

The Employee Free Choice Act is necessary to restore workers' rights, boost the wages and benefits of Americans, and strengthen our economy. Passing the bill would help restore workplace democracy for workers attempting to organize, boost unionization rates, and improve the economic standing and workplace conditions for millions of American workers.

That article is from the Center for American Progress. It all sounds pretty good doesn't it? Who would be against something called the Employee Free Choice Act? :) Look at all those positive things they list in the article. The only thing they don't explain is actually how this act would work, although they strenuosly say that it's democratic.

Here are two articles that offer a counterpoint to the article from the Center for American Progress

http://www.heritage.org/Research/Labor/bg2175.cfm

EFCA requires employers to recognize a union— without an election—once organizers collect cards from a majority of employees.[6] Indeed, the act states that once the union submits signatures from over 50 percent of the employees to the NLRB, it must certify the union without an election. Under EFCA, holding a secret ballot election once unions collect cards from a majority of workers would become illegal.

Union organizers frequently demonstrate that they have no interest in giving workers the choice of how to join a union, especially when such a choice would interfere with Organized Labor's primary objective—recruiting new members who will pay new dues. Organizers in many campaigns tell work*ers that the cards they are signing only count toward an election, and then request card-check recogni*tion on the basis of those cards.

Here is a PDF file that goes into even more detailed study of the issue

http://www.unionfacts.com/downloads/report.cardCheck.pdf

It's a fairly large document but it has some interesting stuff in there. Yes, I expect that once the Employee Free Choice Act finally passes (Obama is already on record as saying he will sign any legislation that has that in it) the UAW leadership will all pile into a Chevy truck and drive on down to South Carolina and pay a visit to the BMW plant.

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Yep Chapter 11 will be avoided for all the wrong reasons.

Daft to consider elimination of competition - between the big three - when you have Nissan, Honda, Toyota etc all able to build in the US. Competition will occur. I see SEAT[part of VW] are launching a cheap 73mpg that will sell in the expensive UK for ÂŁ12K. This is better than most hybrids and cheaper.

Unions can be bad and good - but poor managers will allow the unions too much. I cannot honestly see any car factory wishing to go unionised given the lesson of what kills companies in Detroit. Recruiting spree I doubt hugely.

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Unions can be bad and good - but poor managers will allow the unions too much. I cannot honestly see any car factory wishing to go unionised given the lesson of what kills companies in Detroit. Recruiting spree I doubt hugely.

You must not have read the fine print for the Employee "Free Choice" Act. Basically, every employee is given a card where they indicate whether they want to join a union or not. This is not a privately made choice - this card is marked in full view of everyone involved so the Union bosses (and management) know exactly who has decided to unionize or not. With a system like this in place it doesn't take much of an imagination to see various Union Organizers making house calls on those employees who decided not to select unionizing. In fact, there are documented cases where Card Check has been used where Union Organizers visit employee homes so often that the employee ends up joining the union just to get the organizers to leave them alone. If you are thinking "well management could intimidate just as much as unions could" then you may want to also wonder why Unions want this piece of legislation so much. It's all spelled out in the last two articles I linked to.

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Yep - well the managers of the country can screw up just as much as the managers of a company and that particular bit of legislation seems pretty dodgy.

We also have voluntary unionism here - an employer is not allowed to stop employees joining unions - but there's nothing weird like having to make a choice under scrutiny - if you want to join a union you ring them up and tell them - I've joined, left and rejoined my union a couple of times in the last 6-7 years depending on how good or bad I thought their performace at the time.

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The UAW doesn't feel it needs to agree to anything. All they have to do is keep the Big Three (mostly GM) going until Obama takes office and the new congress is sworn in and they can get whatever they want. Now it's a matter of whether the Republicans will blink first - they don't want to upset all those Michigan voters either now that this whole thing has become a political circus act (McConnell has a stake in it too). If the Republicans can somehow get GM to file for Chapter 11 without giving the democrats an opening to pin it on them then we might see Chapter 11. If the Republicans will be painted as 'letting GM fail' and for causing fire and brimstone falling from the sky, dogs and cats living in sin, etc etc, then the Republicans will blink and you may even see some money coming from the 700 billion that was passed for the financial markets. The dems know they only have to get GM through to February - after that it's all gravy. For those non Americans looking on with fascination, the UAW has enormous power and the issue with the UAW even goes beyond the wages they are earning. Here is an article about a new state of the art manufacturing plant that was built in Brazil (completed sometime in 2007 I think)

http://www.detnews.com/apps/pbcs.dll/article?AID=/20070822/AUTO01/708220407/0/SPECIAL

It's a magnificent facility by all accounts, but you will never see a super efficient plant like that here in the US because the UAW won't have any of it.

This state-of-the-art manufacturing complex in the northeastern Brazilian state of Bahia is not only the centerpiece of Ford's Brazilian turnaround plan, it is also one of the most advanced automobile plants in the world. It is more automated than many of Ford's U.S. factories, and leaner and more flexible than any other Ford facility. It can produce five different vehicle platforms at the same time and on the same line.

Ford sources said it is the sort of plant the company wants in the United States, were it not for the United Auto Workers, which has historically opposed such extensive supplier integration on the factory floor.

Here is a video about the same plant.

http://info.detnews.com/video/index.cfm?id=1189

The big three are also profitable in overseas markets ... well at least Ford is (which is probably why they are in the best shape)

http://www.chron.com/disp/story.mpl/business/5726456.html

Ford said it made $257 million pretax in South America, up from $113 million a year ago. In Europe, it made $739 million, compared with $219 million in the first quarter of last year.

Volvo had a pretax loss of $151 million, compared with a profit of $94 million a year ago. It was the first quarter the company broke out earnings for the Volvo unit.

You might ask yourself - "what's the difference between Ford overseas and Ford in the US?" The UAW (a weak dollar helps too :))

I also feel the need to point out that there are a lot of non union workers working at the big three. Engineers, accountants, ad reps, etc. This is a popular site for those guys (an old high school friend of mine is a brake engineer at Ford) and can give you a little insight about what they think of the whole thing

http://www.autoextremist.com/

from his Dec 10th tirade :)

Detroit. It occurred to me after having been subjected to yet another painfully lame interview of Speaker of the House Nancy Pelosi, who has been doling out “haircuts” in Washington at a fevered clip in order to see to it that the Auto Industry Financing and Restructuring Act has real teeth in it - by her estimation - that the domestic automobile industry, at least as GM and Chrysler know it, is going to be inexorably altered - and not in a good way either. As a matter of fact, if the auto companies actually survive Washington’s “help,” it will be a miracle of this new century.

Pelosi - who will be henceforth known in these pages by her newly-minted sobriquet of “Queen LaGreena” - and her esteemed Dunderheads (I mean colleagues) on both sides of the aisle have been hell-bent on making Detroit pay for its countless transgressions – both real and imagined – affixing blame for whatever is currently ailing the U.S. in general to the domestic automobile industry in a masterful redirect of the anger of the citizenry at the piss-poor conditions of the economy.

His opinion of the auto bailout package :)

The evidence? Two hoary stereotypes remain in effect in Washington even after members of Congress have been exposed to reams of evidence and pound upon pound of facts and figures about this industry over the last month. And these stereotypes are

1. Detroit is stuck in a time warp that seems to hover around 1995. And 2. “Fixing” Detroit and the problems facing the domestic automobile industry will take the sacrificing of a couple of executives, a dollop of more stringent emission regulations and fuel economy standards, a couple of finger snaps and voila! It will be just a matter of months before thousands upon thousands of shiny green cars will be marching out of shiny green factories built by shiny happy people singing:

Hi ho, Hi ho!

It's home from work we go!

We did our part - we churned them out

Hi ho, Hi ho, Hi ho!

(While saluting pictures of Queen LaGreena and the Car Czar as they file out of the gates, no doubt.)

:) yeah, they aren't too happy about the bailout either.

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Sorry I was wrong on the Union recruiting bill. Speaking as an ex-union rep that sucks.

The difference abroad may well be better cars and no stupid finance deals - AND no kowtowing to unions. STrange that iis the case in socialist Europe. : )

Perhaps - I'm more inclined to look at the culture of borrowing in different countries. I'm not sure borrowing is quite as broadly used in mainland Europe as in the US, Britain and Australia; anecdotally the Swiss at least are quite conservative. And the European auto industry went through it's collapse(s) quite some time ago. There is more competition for the available market, too. Maybe look at the percentage of owner occupied dwellings vs rentals?

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One point I can't figure out: If the contracts the UAW imposed on GM were so lethal that it wiped them out in three years, why did the manufacturers agree to them? They could have stood their ground, and eventually Bush would have appointed a mediator favorable to 'Big Business' as oppossed to 'Big UAW'.

What happened? did Vito Corleone hold a gun to GM CEO's head, and offer "A deal they couldn't refuse," or were they so inept they couldn't forcast anything but sunshine and happiness scenario?

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I bet what drove the CEOs thinking was personal income.

Option 1 - (the one they picked) Keep on ops as before with crappy cars, no inovation, minimal investment, and UAW on board and pushing production. The strategy is pile up short term profit and run, and assume energy-efficiency is not something the market will demand (which is different from need) in the next 4-5 years. Pump out the SUVes the American buying public wants. Yes it's short-sighted, but think of rising share prices and bonus payments to top executives. It's a sweet deal as long as they don't have to answer for the long term.

Option 2 - Overhaul production, fight the political fights to push high-cost production offshore, invest in new tech, probably split off unprofitable divsisions and bankrupt them so you can get rid of the old equipment and staff overhang, and generally think long-term. The assumption is the market will want and need energy-efficient autos in 4-5 years, that cheap fuel will stop being available in 4-5 years, take the hit on profits over that time, and - critically - assume executive personal income will be in aggregate higher once the company is overhauled.

This would have been a very risky bet as, of course, executives pushing the costly internal reforms needed to overhaul the companies, would have gotten it from both sides: from the unions for cutting jobs, and from the stockholders for bombing the profit margin.

It is critical in economics to remember that the thing that maximized profits, at bottom, is not the corporation or business or enterprise. It is the individual. And at issue here is what is the rational move for top auto company executives seeking to maximize their personal income. Considering as a group these are guys probably a decade from retirement or less, and well aware this is the last chance they'll have to contribute to retirement accounts or max out their personal income, it is alot to expect the auto company decision makers to be so forward-thinking as to sacrifice personal income for the sake of a company they won't even be working for, once the reforms kick in, if the reforms work.

These CEOs to maximize their personal income needed stock share prices up, big corporate profits, and unions playing ball and able to max out production now. Sure that policy creates problems later, but if the CEOs are retired later then why should they worry about that? That's some one else's problem.

There is plenty of blame to share around here, but at bottom this is a result of allowing the search for maximum profits to drive a strategic manufacturing industry. Every one could have been more responsible. The executives could have said "We'll take less income, let's make the company ready for the future." The unions could have said "We're pricing our services out of the market, we need to work with the CEOs so the product remains internationally competative." The buying public could have said "SUVes are wasteful, tacky, and prone to breakdown; we want reliable fuel-efficient sedans."

None of that happened. The CEOs kept their personal worth up, the unions defended their interests, and the buying public assumed SUVes would retain value over the medium and long term.

Until you adress what's driving the market, you'll never solve the problem. This is not the first time there's been talk of bailing out Chrysler, it isn't even the second. A big problem here is that "turning a company around" up to now has been defined as "returning company to short term profit" when probably a better definition would be "making the company long-term competative." I see little evidence the bailouts being talked about now are anything but good money after bad.

What is incorrect is the claim the failure of these companies would mean the end of auto manufacturing in the US. It would almost certainly mean the end to inefficient auto manufacturing. But there are too many foreign manufacturers, and indeed Ford, with their heads well above water, crisis or no.

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One point I can't figure out: If the contracts the UAW imposed on GM were so lethal that it wiped them out in three years, why did the manufacturers agree to them? They could have stood their ground, and eventually Bush would have appointed a mediator favorable to 'Big Business' as oppossed to 'Big UAW'.

What happened? did Vito Corleone hold a gun to GM CEO's head, and offer "A deal they couldn't refuse," or were they so inept they couldn't forcast anything but sunshine and happiness scenario?

It's because the "Unions are killing us" thing is a myth created by the big 3.

To be sure, labor costs for the Big 3 to produce cars are higher than labor costs for foreign automakers, and this certainly hasn't helped. But this isn't the root of the problem, and it's important to recognize that the difference in labor costs is primarily in continuing to fund retirement programs for workers that have already left, or are relatively close to leaving the workforce, not the cost of employing the men and women who are actually working on the assembly lines today and will be for years to come (assuming the companies stay afloat). So unless you're willing to cut these retirement benefits, you're not going to get very far. And that's political poison.

Long term, the good news is that as more of the big 3's retired work force dies off, their labor costs will get cheaper. This will take a while, though.

To borrow a phrase from another blowhard, the "Inconvenient Truth" that the Big 3 executives don't want you to know is that labor costs are only about 10% of the costs of making and selling a car. And furthermore, even under their own worst-case cost projections for UAW labor (which are a bit suspect), their higher labor costs only ad about $800 to the costs of a GM or Ford built car, vs. a comparable Toyota or Honda.

American consumers have already willing to pay roughly $2500 more (on average) for a Toyota or Honda vs. a comparable domestic model. So do you really think GM, Ford, and Chrysler cars would suddenly start selling like hotcakes if they were $800 cheaper?

The fact of the matter is, the reason GM, Ford and Chrysler are in trouble is because they are making cars that no one wants to buy. Until they fix this, no UAW concessions or government financial assistance is going to do a damn thing. This is the fault of the high-paid executives who run the company and are supposed to provide strategic vision, not the UAW workers who build what they're told to build.

I'm all for Union reform, and I do think some of what the UAW expects is unrealistic; more flexibility on their part would certainly help turn these companies around and benefit everyone (workers, stockholders, and the public at large) in the long run. But let's be realistic as to where the real problems lie; UAW members could offer to give up all benefits, and work for minimum wage, and it still wouldn't save GM.

Cheers,

YD

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True enough YD. I must admit I had not thought of what proportion of the total cost labour was for a vehicle.

The shoddiness - as evidenced by recalls - of the build must be a big turn-off. The collapsed second-hand market for US models as the hire companies dump their cheaply acquired Big 3 models also made them unattractive financially also.

Talking Unattractive there was an SUV so ugly :

http://en.wikipedia.org/wiki/Pontiac_Aztek

Fundamentally I agree with BD6 - or he with me- poor quality management.

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The UAW doesn't feel it needs to agree to anything. All they have to do is keep the Big Three (mostly GM) going until Obama takes office and the new congress is sworn in and they can get whatever they want. Now it's a matter of whether the Republicans will blink first - they don't want to upset all those Michigan voters either now that this whole thing has become a political circus act (McConnell has a stake in it too). If the Republicans can somehow get GM to file for Chapter 11 without giving the democrats an opening to pin it on them then we might see Chapter 11. If the Republicans will be painted as 'letting GM fail' and for causing fire and brimstone falling from the sky, dogs and cats living in sin, etc etc, then the Republicans will blink and you may even see some money coming from the 700 billion that was passed for the financial markets. The dems know they only have to get GM through to February - after that it's all gravy.

It's nice of the Republicans to make it easy for them

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To borrow a phrase from another blowhard, the "Inconvenient Truth" that the Big 3 executives don't want you to know is that labor costs are only about 10% of the costs of making and selling a car. And furthermore, even under their own worst-case cost projections for UAW labor (which are a bit suspect), their higher labor costs only ad about $800 to the costs of a GM or Ford built car, vs. a comparable Toyota or Honda (snips)

That's not a good argument at all, as from the company's perspective, workforce is the main cost factor of which it can exert any influence on short-term. That 800 dollars is surely more than the whole profit margin by unit by a factor of two, or something, even if I have not familiarized myself with auto industry.

On more longer term, subcontractor networks are the most important thing what decides what manufacturers stay afloat and which not, almost irregardless of what industry we are talking about.

Obviously everything in the US auto industry sucks badly, including politicians they have managed to buy.

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By SSgt Viljuri

from the company's perspective, workforce is the main cost factor of which it can exert any influence on short-term.

How long does a company "live" ?

The thing is the prevalent fiscal-quartal-management does not benefit the company in the long run. The only thing it does any good is the managements 12-month bonuses.

On more longer term, subcontractor networks are the most important thing what decides what manufacturers stay afloat and which not, almost irregardless of what industry we are talking about.

True up to a point. What is more important is the buying power of the market. When that falls the entire equation becomes impossible to manage. When the subcontracting is bought from the lowest bidder (China) then the customer base is emasculated. When you become too cost-effective you bleed yourself dry.

Obviously everything in the US auto industry sucks badly, including politicians they have managed to buy.

Lets not forget the oil industry from this equation. ;)

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One point I can't figure out: If the contracts the UAW imposed on GM were so lethal that it wiped them out in three years, why did the manufacturers agree to them? They could have stood their ground, and eventually Bush would have appointed a mediator favorable to 'Big Business' as oppossed to 'Big UAW'.

What happened? did Vito Corleone hold a gun to GM CEO's head, and offer "A deal they couldn't refuse," or were they so inept they couldn't forcast anything but sunshine and happiness scenario?

I would guess that since the UAW can give close to 100 million dollars to various democratic campaigns in the course of a year that they have a pretty significant war chest for keeping their members happy during a strike. Considering that GM is asking for money right now and guessing that the UAW has as much as several hundred million squirreled away in case they need to strike then they are probably confident that they could outlast the corporate leadership of the automakers if it came down to a contest of strength. The UAW could just refuse to work until the automakers cried uncle. This is just my speculation though.

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It's nice of the Republicans to make it easy for them

LOL. Simply filibustering the bailout bill to cause it to fail isn't enough since the majority of Americans are currently opposed to the passage of a bailout bill for the automakers (something like 60% opposed). Nobody knows what will happen for certain if GM files for Chapter 11 bankruptcy but we do know for certain that there will be some job losses. We don't know how many, but the dems are already saying ridiculous numbers like three million. If you get enough slanted or one sided articles like this one

http://www.reuters.com/article/domesticNews/idUSTRE4BB04B20081212

and if after Chapter 11 bankruptcy public opinion swings to a pro bailout position after seeing thousands of hours of NBC newscasts showing poor autoworkers who have been laid off while the government spends billions to bail out those fat cats on wallstreet or to pay for an unpopular war then it could hurt the Republicans at the polls. So the risk is that Chapter 11 causes enough job losses (doesn't have to be three million, but a couple hundred thousand would be enough) to give the dems and the UAW an opportunity to feed all sorts of stuff to the sympathetic press about fire and brimstone falling from the sky, dogs and cats living in sin, etc. Sure the dems and UAW are already blaming the republicans in the senate, but will it stick? Nobody knows for sure.

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I would guess that since the UAW can give close to 100 million dollars to various democratic campaigns in the course of a year that they have a pretty significant war chest for keeping their members happy during a strike. Considering that GM is asking for money right now and guessing that the UAW has as much as several hundred million squirreled away in case they need to strike then they are probably confident that they could outlast the corporate leadership of the automakers if it came down to a contest of strength. The UAW could just refuse to work until the automakers cried uncle. This is just my speculation though.

But since the President appoints the neutral, for mediation of deadlocked negotation, they had from Sep 2007, until Jan 2009 to wait out the UAW. I wonder how much GM pays it's lobbyists?

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But since the President appoints the neutral, for mediation of deadlocked negotation, they had from Sep 2007, until Jan 2009 to wait out the UAW. I wonder how much GM pays it's lobbyists?

I can't answer that second question (and they do have lobbyists - no denying that). However, by waiting out the UAW I mean that the UAW could not work for about four months and GM would probably be toast by then (make no cars, make no income - pretty simple). The President can intervene but he doesn't have to. He can also appoint an arbitrator, but there is no guarantee that both sides will agree to it.

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By Stalin's Organist

it's only the rich that should be allowed to organise their resources, etc., etc......

Waddayamean ? They HAVE been allowed to organise their resources and look what they have done with them - they zapped their customer base buying power by moving jobs to areas not considered to be heir prime market area.

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Yup - for some reason they figured they'd only need enclaves of monied people to ensure that they lived their lives out in comfort. Total disregard for the need for security on trade routes between enclaves - or they were being connned into believing they were paying (handsomely) for that. We devolve to a feudal society...

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Yeah yeah - we're getting your picture all right - the UAW is responsible for everything bad in the auto industry' date=' and unions in general are the antithesis of everything that is good about the capitalist system - it's only the rich that should be allowed to organise their resources, etc., etc......[/quote']

:) I don't know why you would get that impression. If you read all the articles I linked to you would see that there are a number of factors involved with the current problems with the big 3 - too many nameplates and too many dealerships that they can't get rid of are just a couple. The only reason that the UAW is the big topic in this thread is that there seems to be a whole raft full of union members from foreign lands who don't understand the way unions have a stranglehold on the auto industry here and are defending them at every turn. If you union types can come into this thread and just say "yeah, the UAW is part of the problem" why then we could probably move onto something else. If you keep defending them though and hold them blameless I have to keep pointing things out. As the Big Three say themselves when discussing their overseas operations - unions are just different overseas. You can't take whatever union you are a member of in your foreign land and assume that it's the same way here because it isn't. The UAW here has a lot of political clout that has been gained by taking membership dues and donating literally millions upon millions of dollars to democratic political campaigns (and you as an individual union member have no say as to where that money goes). They have imposed ridiculously stringent work rules at the job site, they get paid and get benefits that are much better than your average American worker, and they have enough power to basically sit in a position of power in any negotiation they enter into. Just take a look at the Employee Free Choice Act and tell me that you would like a law like that. Someone on here said they join their union by phone then leave the union and rejoin or something ridiculous like that. Leave a union? No way are you leaving a union here - if you want to keep your job you will remain a union member. Yeah - the union boss will have you fired from your job if you try to leave the union. Of course, you can't even get a job with the Big 3 if you don't agree to join the UAW first. Yeah, the UAW won't allow you to get hired if you don't join the union. Ford wants to build a state of the art manufacturing facility? No way they can build it if the UAW thinks that it will be so efficient that it will cost them jobs.

I can understand that union members from outside of America would stand in solidarity with their union brothers and sisters here in the US, but don't make the mistake of thinking that the rules of the game are the same here as they are in your land. The UAW even has enough political clout here to torpedo the free trade agreements with Colombia and South Korea. We are talking about international trade agreements here - no go as long as the dems are in control and the UAW is opposed to them. Unions serve a purpose - there is no doubt about it. It's not the 1890s anymore though and the greedy corporations can't call the local police out to knock heads. The Unions here also have a long history of mob connections. Whether they are still influenced by the mob or not I can't say. Here in the US the balance of power is with the Unions not with those greedy corporate management types. Right now the UAW is calling the shots. Once you are willing to see that, the great light of understanding will come shining down upon you and clarity of vision will be acheived :).

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