Email List Sign Up

Mean Street: Why GM Can’t Be Saved

  • Need a Real Sponsor here

Mean Street: Why GM Can’t Be Saved

Want to know why a nationalized General Motors will struggle to survive?

Just read the UAW General Motors memo “Modifications to 2007 Agreement” sent out to UAW members a couple of days ago.


It’s only 14 pages — and a lot of it is dull union contract procedure and modifications. But the memo shows how the UAW works.

And it shows that while Mr. Obama may promise a new General Motors, you, the American taxpayer, are getting stuck with the old UAW as your partner.

Consider the following. You will soon own 70% of a reconstituted GM at a cost of somewhere on the order of $75 billion. (Not including the GMAC bailout. That will run you another $25 billion)

Then consider that the UAW will be your primary partner in this expensive endeavor. It will control your workforce. It will own 17.5% of the common equity, $6.5 billion in preferred equity and carry $2.5 billion of GM debt. And it will have a seat on your GM board.

Now read the UAW memo and ask yourself if this is the partner you want for your huge investment.

It’s, of course, easy to brush off some of the memo’s language — “brothers and sisters” or “in solidarity” — as just old-school union talk. But such words are important. They remind the union members that they’re in this together and that the UAW’s overarching mission is to protect its members’ interests.

In the memo, the UAW mindset is still “us vs. them.” The “them” being GM’s management and its controlling shareholder which is you, the taxpayer.

Of course, the UAW will make the case it is reopening a negotiation closed only two years ago, that it has made big concessions and that it is treating GM no differently than Ford or Chrysler.

And that’s all true. But those are arguments of a union — not a business partner. So the eternal conflict remains at GM: the investor wants profits, but the union wants wages and jobs.

Nowhere in the memo, for example, does the UAW state that it is eager to make GM the world’s most competitive, efficient and profitable auto company. That’s what any shareholder should want.

But the UAW is not an ordinary shareholder. In fact, the current UAW members are not even going to end up as direct shareholders — it’s the healthcare trust of the UAW retirees.

Hand it to the UAW. The Treasury may have forced it to give some things up, but the UAW cut itself a sweet deal. “For our active members these tentative changes mean no loss in your base hourly pay, no reduction in your healthcare and no reduction in pensions.” In other words, as little change as possible.

With the UAW mindset still stuck in the past, the new, nationalized GM will have a hard time competing with Toyota in the future. Just look at page after page of the modifications to worker categories, work rules, sourcing policies and benefit plans.

How’s this for the “new attendance procedure” in case an employee misses work:

It reads, and this is just part of it, “The modified procedure is a six step process. An employee facing termination pursuant to this procedure’s sixth occurrence may request to have their pending termination reviewed by the Personnel Director and the Shop Chairman to consider whether the employee’s instant absence or failure to call in was due to documented extraordinary circumstances beyond their control…”

Apparently, it takes six occurrences to get yourself fired. And this is the new “modified” attendance procedure? The old one must have been a doozy.

Is this any way to run a business? American taxpayers, you’ll soon find out.

Seniority Lists
Recent Posts!
Bargaining Committee

Mike Herron
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

Tim Stannard
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts

GM Unit Chair
Mike Herron
Leadec Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Katherine McGaw
Retiree Chair
Mike Martinez

Get Text Alerts


*Standard text messaging rates may apply from your carrier