Finally, Today, the Sun is Coming Out for Auto Industry with GM-UAW Deal
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Mark down today, June 1, 2009 on your calendar.
Put a big red star there.
Why? Because this is the day our world here in mid-Michigan begins to change for the better after years of decline.
Last Friday General Motors Corporation, once the largest enterprise in the world, and the United Auto Workers Union made a deal.
Terms of the deal provide that the company will reopen a closed factory and begin to make a new subcompact car line in the United States. . .
. . . INSTEAD OF CHINA.
The Chevrolet Spark will be the smallest vehicles ever built in the U.S. And, it gets about 47 miles per gallon and, the company boasts, low maintenance costs.
Out the window went the idea of building the Spark in China and importing about 51,000 of the mini vehicles to the U.S.
GM plans to make about 160,000 Sparks, using a now-closed plant and rehiring about 1,200 workers.
Unfortunately, 14 plants employing about 21,000 workers are being closed soon.
Meanwhile, the huge, gas guzzling Hummer will go down the road to another company or to the bone yard.
The deal to sell assets will create the new GM instead of reorganizing the old company.
Even previously reluctant bondholders agreed to swap $27 billion in debt for equity, gaining about 10 percent of the new company. Analysts said the bond deal will ease restructuring.
The UAW will hold about 17.5 percent of the new company by terms of the deal, making GM in part an employee-owned company and perhaps motivating workers to even greater cooperation.
Consultant Aaron Bragman of IHS Global Insight said: "In the past few months we've really seen steps being taken to completely and dramatically change the face of American auto manufacturing."
The agreement, both sides agree, will make GM competitive once again.
About 75 percent of all production and skilled trades workers voted for the agreement that freezes wages, ends bonuses and throws out work rules that hampered GM's competitiveness.
"This settlement agreement will give GM a chance to survive the worldwide collapse of industry sales and return as a viable company once the economy recovers and consumers begin purchasing vehicles again," said Ron Gettelfinger, UAW president.
Today, Monday morning, GM has called a news conference in New York at which it is expected to declare bankruptcy.
However, the bankruptcy is not the end of the world; it signals the final step in restructuring the GM dinosaur into a sleek new animal that again will dazzle the world.
The restructuring qualifies GM for more government assistance, $30 billion to be exact, while the 60-90 day reorganization goes through the courts.
You and me, the taxpayers, will own about 70 percent of this new company. We will have about $50 billion invested in its success.
The UAW should no longer be perceived as the enemy, even by anti-union conservatives; the workers are our allies in remaking the U.S. economy. We are all invested in the future of the nation and all thinking citizens need to realize that fact.
I've often wondered whether Americans bought foreign cars to teach the UAW a lesson. The quality issues have leveled out but some folks apparently were jealous of worker pay and benefits, and perceived them as less than efficient, a feeling I have heard many state about school teachers, too. Personal enmity often overwhelms good sense, unfortunately.
But now we all have a stake in GM. The virtually worthless shares, that last week dropped to an unheard of 75 cents a share, can come back -- if we decide to support our own company.
Perhaps the shuttered plant that reopens to build the new subcompacts, adding 1,200 jobs, will reverse the decline.
If sales perk up, car makers eventually could be more profitable than they have ever been because of all the costs that have been cut, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.
"After you rebound from this artificial low demand, wow," Mr. Cole said of auto sales and profit potential.
All we can do is hope, and make the right decision when we decide to buy a car.###
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Anonymous says:
On June 01, 2009
at 04:32 PM
"I've often wondered whether Americans bought foreign cars to teach the UAW a lesson. The quality issues have leveled out but some folks apparently were jealous of worker pay and benefits, and perceived them as less than efficient,"
************************************************* You've apparently never known anyone who was a member of the UAW. Production workers were making $100,000 per year with overtime, some purposely working 7 days a week to make that kind of money. They were making twice what the GM white collar workers, mostly management with 4 year degrees were making. Who's health benefits were taken away first?? The white collar workers and retirees, the ones who were making less money with more work and no overtime. The UAW protected the production workers in EVERY way possible. GM allowed this travesty to happen which IMO, is what caused their collapse. Now that the governments nose in this big time, watch creativity die. |
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brandonbaycity Says:
On June 07, 2009
at 01:54 AM
Now that the governments nose in this big time, watch creativity die.
***************************************************** I concur. You are half right, the government will use the mainstream media to bamboozle us into thinking this move to get involved with GM is a good idea. It's our money, why would you want a stake in GM when FORD makes better vehicles? Why would you want a stake in Ghrysler, when Mercedes makes a better vehicle? And last but not least, why would you want a stake in a Government owned union supported auto industry that has been making the wrong decisions for several years by outsourcing jobs, and cowing over to the UAW? My failures in life, I learn from them, Government should learn their failure is coming. revolutionbroadcasting.com |
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