Making Sense of a U.S. Owned General Motors (tags)
Now that the United States owns General Motors, many are asking, “What’s in it for taxpayers?” This is an extremely good question, considering that taxpayers may spend up to $100 billion [!] towards a company that’s currently worth around $450 million. (Wall Street Journal, 6/02/09) This large discrepancy in numbers means, obviously, that taxpayers could lose tremendous amounts of “investment” money if Obama’s “profit first” plan is put into effect. What is this plan? Strip the company to a fraction of its former self, using far fewer workers and making far less money in the hopes that GM will then out-compete the foreign competition on the world market.
Chrysler, Globalization, and Labor's response (tags)
The UAW will confront Detroit auto makers at the bargaining table in July for a new national contract. In what will prove to be one of the UAW’s biggest challenges since the union’s birth, this contract will bear the imprint of the wholesale restructuring of the American auto industry. When Cerberus Capital Management paid $7.4 billion to take control of Chrysler on May 13, 2007, the challenge to the Union was official: “Are you ready to negotiate with a private equity firm which specializes in gutting troubled companies?” The UAW’s position on Chrysler will undoubtedly influence negotiations with General Motors and Ford. Cerberus wants to cut costs to make money off its investment. Contract talks open up a golden opportunity for the bosses to cut costs at the expense of the workers on the assembly lines. Cutting benefits which previous generations sacrificed, fought for and in some instances, died for, is what is at risk for auto workers in 2007.