Gm ponies up 200 million to end American Axle strike.

"...the strike cost GM's North American division $800 million because the company lost production of about 100,000 vehicles"

"GM also said the strike has cut its liquidity by $2.1 billion but said it has the money to meet its needs even if U.S. industrywide auto sales continue to drop."

Another 2.3 billion down the drain...19.9 left.

http://biz.yahoo.com/ap/080508/american_axle_gm.html

Union wages can be reduced one of two ways - they accept pay cuts or GM orders parts / assemblies from overseas competitors and they get laid off.

Union workers must be absolutely tone deaf if they think they can earn significantly more than those who work at American Toyota, Honda, Nissan, Suburu, BMW, etc. plants. As long as that cost premium exists, those plants will struggle to compete.

I watched a little interview on a business show today with a GM stooge and some other random talking head...can't remember who.

Sounds like a small portion will be used to offset some costs, but a large part would be earmarked to 'buyout' employees...something AA was not willing to do. Then those employees would be replaced on a 2 to 1 basis with new lower wage hires...ala big 2.8 style.

(Note: Interview was mostly conjecture has no firm details/deals/ratifications were announced)

I understood the same thing for various articles, that GM's major push was to reduce longterm costs by buying out the union workers who are grandfathered under old contracts.

If union wages came down, then GM could hire like crazy and even produce enough vehicles to export. I have a sinking feeling that the UAW will never let GM get to that point.

Union wages can be reduced one of two ways - they accept pay cuts or GM orders parts / assemblies from overseas competitors and they get laid off.

Union workers must be absolutely tone deaf if they think they can earn significantly more than those who work at American Toyota, Honda, Nissan, Suburu, BMW, etc. plants. As long as that cost premium exists, those plants will struggle to compete.

Actually

http://www.autoblog.com/2007/01/31/toyota-workers-in-us-made-more-than-uaw-members-for-first-time-l/

It's all about Healthcare and Pentions;) Having worked in a plant it's about production also. If a guy is suppose turn out 300 parts a day in a UAW plant and he does so in 5 hours, he sit's on his arse the other 3.

Job bank is also a huge issue. Not just wages IMO

swoosh,

Thanks for that link - I am happy to see that foreign automakers are able and willing to reward their laborers for their productivity. It gives me hope for American manufacturing.

Even parasitic fish know that if they hinder the shark too much and end up killing it they will soon need to find another shark.

Perhaps GM will be just be another example of an empire that rises and falls under it's own weight. It's not like we don't see the next generation of automakers coming up the ranks. With a major shift in technology (electrification of the automobile) new companies have a massive advantage in terms of having young, non-unionized workforces. Add to that not having to deal with aging an ineffectual infrastructure (Giant SUV, Truck, and ICE plants) and one can easily see that the young lions are about to challenge the king. The question is can the king get in shape in time? Can he shed the extra weight and learn new techniques to fight off the imaginative, healthy and young competitors? I guess we will soon see. Go Volt!

Texas,
I like the aging boxer analogy. That would figuratively (and probably literally) make GM "Rocky". Of course, then someone would have to mess up Bob's styled hair, but I suspect if it meant getting the Volt out on time, he'd allow it (if only briefly).