The United Auto Workers have rejected an offer from bankrupt auto parts supplier Delphi to reduce wages by 35 percent. Because a deal cannot be reached, Delphi is expected to ask a judge to terminate labor contracts and eliminate retiree medical and life insurance benefits. Such a move would make a strike by Delphi’s 33,000 workers almost unavoidable. The strike would likely occur in May. Delphi was formerly a part of GM, and is still a major supplier to the company. A Delphi strike would be devastating to GM, which is struggling to return to profitability. During the first 60 days of a strike, GM would burn through $7 billion to $8 billion of cash, analyst John Murphy of Merrill Lynch said in a report to clients on Wednesday. (GM’s entire loss for 2005 was $10 billion). During a strike, the company “would bleed enormous amounts of cash,” Murphy said.
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03/30, 8:48 AM
posted by:
TW
I get the feeling the only way GM will continue in the long run is to initially “crash and burn”.
03/30, 9:00 AM
posted by:
Anonymous
This could Detroit’s bird flu. Tons of people could get hurt bad – including you schlubs who’s 401K plan is still holding GM stock or bonds. I think GM is run by idiots, and maybe Enron-like criminals if the books have been cooked for the past few years, but you don’t want some wrench at a Chevy dealer being told to wash up and leave..
jim
03/30, 9:44 AM
posted by:
Jason
stupid UAW contracts. shouldn’t have existed in the first place.
03/30, 1:42 PM
posted by:
E M
I agree…some really bad pain in the short term may be just what the doctor ordered for both companies. Let ‘em go into BK, zap the ridiculous Union Contracts, and start over lean and mean. GM and Delphi undoubtedly have some very strong elements to their businesses, but both are saddled by agreements that do not allow them to shed the weakest parts of their portfolios. BK would allow them to do that. GM has some very strong product right now, and even better stuff coming. Just think if they could clean house and start over with this…
03/31, 11:12 PM
posted by:
adron
Unions have destroyed so many businesses it’s insane.
Now they’re destroying one of the last major labor employers in the country.
So are all of these Union Employees going to be happy when they actually have to do work and compete for their jobs with better able employees ( Like the ones working for Nissan, Toyota, BMW, Mercedes, and all those places here in the United States?)
I’m not 100% against Unions but when they’re destroying the company they need to be eliminated immediately.