Everything Else - The travesty of the UAW GM strike - United Automobile Workers

[kusozcom]

Whether it is eleventh hour posturing or the two sides are simply that far apart is a question many are asking today as the 11:00 AM deadline approaches on the UAW negotiations with General Motors. The union has stated that they will clear the plants and go on strike if an agreement could not be reached by eleven o’clock this morning.


The talks had been reported to be going well last evening, and there were even hopes that a settlement could be reached by early this morning. That has not happened as of yet. The union is expressing “shock” that GM is not recognizing all of the contributions employees have made to GM over the past four years. While left unsaid, GM’s market share has deteriorated over that same period, as other automakers with less expensive deals are able to offer consumers more bang for their buck.


In my opinion, the union needs to offer up some concessions. The current deal is oppressive to the competitive environment, and GM, Ford and Chrysler are simply having troubles remaining competitive. Health care, and benefits for the retired work force are massive. The active employment rolls at GM include 73,000 workers. The retired component of GM makes up over 500,000. This is a classic case of a company paying far more to their retired component than to the working component which drives cash flow.


SDARS followers should note that GM has an installation deal with XM Satellite Radio. A short term strike would likely carry little impact on XM because GM has about 1,000,000 vehicles in inventory. Any impact would come if the sales of vehicles were to slow. It would take a prolonged strike for that to be felt in a material way by XM shareholders.


For their part, Sirius has deals with Ford and Chrysler. Both of those manufacturers are working under extended agreements that could be terminated with three days notice. At this point there is no intention of strikes at Ford or Chrysler, however, the terse negotiations could spill over if a deal is not reached, and there is a prolonged strike at GM. Sirius’ subscribers rolls are tied to production, and if a strike were to happen at Ford or Chrysler, the impact would be seen more quickly for shareholders of Sirius.