Yesterday evening, I heard where the UAW is considering concessions including the elimination of the jobs bank. Next, during the hearings today, a merger between GM and Chrysler was also discussed as well as bankruptcy. Last, GM might not survive the month even with a bridge loan.
What the heck is going on? There is so much confusion here in autoland, it is unbelievable. Surreal, even.
Where the problems lie are where the shoes are going to drop.
With the UAW backing off on the jobs bank and talking about reopening the contract, protection for the workers is almost completely out the door. The companies now do not have an incentive to offer UAW workers buyouts, but to lay the workers off. It will be cheaper for them to lay off workers for 48 weeks vs a jobs bank that would support them for a maximum of 2 years. There goes the job security that the UAW negotiated on the behalf of the workers. So why do we need a Union if the Union doesn’t stand up for the rank and file? I can see so many people getting hurt over this – they were counting on this security. And yes, I’m one of those that’s going to get stung.
Merger – I can see nothing good coming from this. Yes, there is a chance that a merged company could survive, but the fallout in the loss of jobs between the merging companies and the suppliers could be catastrophic for the economy.
GM stated during the hearing that they couldn’t survive the month without a bridge loan. Not good at all, and puts pressure on a lame-duck Congress that is reluctant to do anything, especially after being flamed for giving billions to Wall Street with little or no conditions.
Let’s not even get started on bankruptcy – that’s for the next post. Suffice to say, it may have worked for a service industry like the airlines, but it won’t work for the automotive sector.
December is not going to be a month that I’m going to enjoy.