Comments on: CAW Reaches Deal With GM

By: Four Pillars

Four Pillars — Mon, 09 Mar 2009 16:29:11 +0000

Nobleea – I think you’re right – the union doesn’t want to be the bad guys.

Mark – I think the loans are “guaranteed” – but the guarantee is only as good as the company that backs it.

By: Mark

Mark — Mon, 09 Mar 2009 15:47:19 +0000

I know it sounds a bit drastic, read somewhat foolish, but if I was the one doing the “giving” in regards to the bailout money needed, this is what I would do:
1) Change the executives and CEO – they’ve shown they know how to make bad investment decisions and how to spend recklessly…
2) CAW needs to drop another 10$/hour. Average employee makes 70K; you want to keep your job, well times are rough & you need to show how much you want to keep it. You don’t want to, out the door you go. (remember Reagan & aircraft controllers??)
3) I would want to have at least 50% of the loan guaranteed (now I know I’m dreaming, the US has it all but what the heck..)
4) Lastly, and this is the big one, give them 1 year to turn the company around, i.e: get new cars ready, whether they be electrical, small, big, I don’t care, make cars people will want to buy!!!

By: Shank

Shank — Mon, 09 Mar 2009 15:32:07 +0000

It’s all optics and positioning. Reality is money is not GM’s issue and hasn’t been for some time. It’s a symptom and more capital delays what is looking more inevitable.

By: nobleea

nobleea — Mon, 09 Mar 2009 14:53:01 +0000

I think Option B is what’s going to happen.

the unions probably gave up the concessions so they don’t look like the bad guys that forced the bankruptcy.

By: Four Pillars

Four Pillars — Mon, 09 Mar 2009 11:01:21 +0000

Nurse – you’re right about management. I think GM last made a profit in 2004? So it’s not just the latest downturn that has caused their problems.

By: Nurseb911

Nurseb911 — Mon, 09 Mar 2009 09:50:31 +0000

Thanks for the link Mike.

I still see the government at some point supporting them through Chapter 11….I just can’t see how any concessions in this economic environment will dramatically change the economics of their business model. Even if they get costs under control the demand/sales for their product is still far under profitable market conditions.

Let the government take over the company for a 40% premium and I bet that’s still 1/3 of what the overall cost would be in continued bailout money. This sucker has to get “lean and mean”, not just lean and current management needs to be shown the door. Set an example: “You want help?……bye bye!”

By: Four Pillars

Four Pillars — Mon, 09 Mar 2009 01:02:40 +0000

Nicolas, it will be interesting to see what the government does – do they accept this type of deal and hand over the bailout money? or do they make them do more cuts and restructuring? That would be interesting if the government has to be the bad guy because GM won’t.

By: Nicolas

Nicolas — Sun, 08 Mar 2009 22:37:40 +0000

Sadly, I suspect the answer is Option B. GM could agree to almost anything at this point but if it is too obvious, Option A might not work. Sales number are not good (read awful) , consumer confidence is… well isn’t anymore and restructuration under the CCAA in Canada (not bankruptcy yet) can be quite a deal. Just remember Air Canada.

The next few weeks will tell. My heart still goes to the workers.