GM settles with UAW; bondholders hold out

A United Auto Workers healthcare trust fund will get 17.5 percent of General Motors’ common stock, along with preferred stock and a note – if the General stays out of bankruptcy.

Most of its hourly workers will get a buyout offer, reportedly better than the last one.

GM also is taking back control of five Delphi factories.

Whether this all is enough for GM to get bondholders to accept their own deal by midnight tonight is still very much up in the air. If it’s no deal, then it’s down the road to bankruptcy. Where the UAW deal would then stand, I don’t know. I’m guessing that, since the UAW has backed far enough off its starting point, it might survive.

If GM does go bankrupt, somebody is guaranteed more work for sure – a legion of bankruptcy lawyers.

GM wants to double imports while closing US plants

Of course, and deservedly, the United Autoworkers are mad as hell about this idea.

GM acknowledged in documents submitted to Congress that it plans to start importing small cars from China starting in 2011, with the number rising to more than 51,000 by 2014. But the company says the percentage of cars made and sold in the U.S. will remain stable, with fewer imports likely from Canada.

OK, so now, Canada’s affiliate of the UAW, already pressured by Prime Minister Stephen Harper to make more concessions, has ITS reasons to now be mad.

Another issue? How to fund a union-run trust that will adminster retiree health care costs starting in the future. The Obama Administration wants the union to take GM stock in exchange for 50 percent of the $20 billion the company must pay into the trust, the story notes. Obviously, the UAW would like to do this before a GM bankruptcy filing.

Chrysler dodges bankruptcy bullet? UAW makes dumb move?

Facing a Thursday deadline for Chrysler to restructure or likely get cut off from the government teat, its largest lenders agreed to a major debt restructuring.

Meanwhile, the Ram could getmajority union ownership as part of its larger restructuring.

I personally think it’s a dumb idea; Chrysler has even less to offer in the way of non-gas guzzlers than does GM. The employee work tasks/definitions restructure may help, but that doesn’t totally address the timeframe needed to turn around a crappy brand outside trucks. (Even there, Dodges are among the biggest gas guzzlers.)

And, all in exchange for just one UAW health trust fund seat on Chrysler’s board? I guess the UAW is both easy AND cheap.

Details of the Obama ‘nyet’ to GM emerge

Besides dinging GM, and Chrysler, for being too reliant on trucks and SUVs, Obama Administration documents to the two automakers fault their vehicle quality, among other things.

It’s also clear that, with publicly-traded GM, the administration is making clear this is a wake-up call to bondholders to give more in negotiations with GM.

Also, more people besides CEO Rick Wagoner will be leaving GM, too.

As for the UAW, though not specifically mentioned, it’s going to have to wake up on both car quality and vehicle size mix, too.

That said, the Detroit News unloads with both op-ed barrels on this issue. And, they have some good points, above all, wondering if Obama is not creating a deliberate distraction from Wall Street issues.

He can portray himself as being tough on the corporate executives who are ruining America, without having to draw blood from the bankers.

That is at least possible, Obama killing two birds with one stone.

GM considers Chapter 11 - will it work?

That's the BIG news out of formerly Big Three members GM and Chrysler. Both have until Tuesday to submit reorganization plans to qualify for $17.4 billion in federal loans. GM reportedly is looking at the second option of asking for more federal money to stave off bankruptcy.

I doubt that's likely without an ironclad, trimmed to the mast reorganization plan being part of the request.

And, right now, that's not likely to happen. Although GM and Sweden deny it, it can't find a Saab buyer. Nobody will touch Hummer. Outside of cars itself, GM doesn't even have a majority stake in GMAC anymore. And UAW talks with both automakers have broken down.

And, that all said, the 2005 bankruptcy "reform" bill changed commercial as well as individual bankruptcy. It's part of why retailers like Linens n Things and Circuit City wound up liquidating rather than coming out on the far side.

UAW - be very wary of BushCo on GM and Chrysler

Remember, a bankruptcy filing is a way of forcing wage and benefit concessions out of employees.

If you’re not sure of that fact, ask airline pilots and flight attendants at most major carriers not named Southwest.

So, Bush may be doing, or being asked to do, the bidding of Richard Shelby et al.

Auto bailout dead for 2008; who’s to blame?

With the United Auto Workers refusing to accept Senate Republicans’ drastic take-it-or-leave it Hobson’s choice on rapidly cutting union benefit overhead, an automakers’ bailout for 2008 is as dead as a Fred Thompson presidential campaign.

Who’s to blame?

• Well, per the story, one problem is the Big Three have been in business longer in the U.S. than have the Japanese Big Three. They’ve got more pension overhead because they’ve got more retirees per current employees.

There’s no “blame” there, of course, but there is a reminder that we may be comparing apples and oranges at times.

• Beyond that, as I’ve already said about two dozen times, the Big Three, and above all, the General, have plenty of blame to shoulder in different ways.

And, the UAW has its fair share.

Not counting enabling Michigan politicians, I would slice the blame within the industry as roughly 2/3 management and 1/3 unions. Within management, I’d give 2/3 of that blame to General Motors.

Per previous posts under my “automakers’ bailout” tag, I’ve noted that GM ignored early in-house minivan designs and hybrids research back in the ’70s, as prime mismanagement examples; even today, its Allison division is a world leader in making hybrid buses, but it still doesn’t have a full-hybrid car.

I’ve also blogged on how UAW President Douglas Fraser invited the Japanese Big Three here in the late 1970s, but never made an effort to unionize their plants, despite having had advance contacts with the Japanese equivalent of the UAW and despite Honda’s first plant being in Ohio, not the South, for example.

Both management and the UAW have plenty of blame on the “green” side, along with those enabling politicians. (Can somebody park a Suburban on John Dingell’s front lawn?)

Finally, two wrongs don’t make a right.

Rather than using the argument about how Crazy Uncle Henry Paulson’s been so lenient with his investment banking A-list buddies, the argument should be flipped – the incoming Congress has the opportunity to be just as tough with the financial sector as with the Big Three. (I’ll have a post up with more of these thoughts this afternoon.)

On, and especially given that normal assembly plant holiday shutdowns are just around the corner, Krugman (before he tried to qualify his words) is right — GM should die.

UAW ‘cut its own throat’ 20 years ago

Union management stupidity with Japanese plants equals Big Three management stupidity

Jonathan Cutler asks an elementary question — why didn’t the United Auto Workers unionize the Japanese auto plants built here in the U.S.?

The normal response is one of two things — people say it’s because the U.S. plants are all in right-to-work states or because Japanese carmakers are strongly anti-union.

To which Cutler replies:
• Japanese plants in Japan are unionized, under the Japanese Automobile Workers Confederation;
• Honda’s first U.S. plant was the one it still has at Marysville, Ohio;
• The UAW had plenty of contacts with the Japanese union;
• UAW President Douglas Fraser invited the Japanese to come build here.

Read the full story, then scratch your head at the stupidity of the UAW.

Hypocrisy alert — Carl Levin on Big Three

Michgan Sen Carl Levin says Big Three CEOs should resign in order for their companies to get government bailout loans.

And will you be joining them, Carl? And taking brother Sander? And Reps. John Dingell and Dale Kildee, among others? And Sen. Granholm, Gov. Stabenow and yet more?

Along with that, how about UAW Prez Carl Gettelfinger? Will Michael Moore resign from documentary filmmaking since he failed to look at all of these angles in “Roger and Me”?

To be fair, a Detroit Free Press columnist says it’s not fair for today’s Big Three to be tainted by past mistakes.

Agreed — at least for the sake of argument.

But, Detroit has plenty of current-day mistakes as well.

Ford had a 65-mpg diesel hybrid at auto shows two years ago. Where is it?

Why wasn’t the Volt ready years earlier, instead of GM going for do-nothing greenwash with hydrogen cars?

GM wants more fed money pounded down rathole

UAW chief still clueless on formerly-Big Three or nobody

Michigan Gov. Jennifer Granholm has joined five other state leaders in asking for federal bailout money to go directly to the U.S. auto industry.

First, it's really credit card companies and banks wanting the money; that's why the governors of Delaware, New York and South Dakota are co-signers of the request.

Second, plenty of questions, and doubt, remain about the prime idea of a GM-Chrysler merger.

If consolidation of the two companies involved selling off all non-Jeep divisions of Chrysler, how well would that help? Especially if gas prices go back up as the country comes out on the far side of recession and SUV sales stay low?

That's just one of many non sequiturs of a possible merger that the article above raises.

Third, the UAW apparently Second, just doeesn't get it. Even if not a GM-Chrysler merger, somebody is likely to buy somebody within the auto world (Nissan has also been a suitor for Chrysler, for example) and more jobs will go away.

Especially when Ron Gettelfinger pins the hope of U.S. auto revival on the sale of more SUVs, it's clear he's a dinosaur, if not quite, or not necessarily, an idiot.

And, I did not link the the Dallas Morning Snooze on this; despite GM having a plant in Arlington, the Snooze ran a wire story.