GM in the news

[Spurlee]

News regarding the bankruptcy:

GM Chairman and Chief Executive Rick Wagoner, who took the unusual step of denying in a letter to staff last week that GM was preparing to file for bankruptcy protection, said he was not prepared to discuss GM's 2006 profit outlook.

The UAW response to the sutiation:

The UAW responded to Wagoner's announcement with an angry statement to the media indicating it would push to keep furloughed workers on GM's payrolls for the duration of its current labor contract, which expires in 2007.

That could mean that laid off workers would continue to receive most of their pay and benefits, with the plant closings providing little immediate savings to GM.

I think the UAW should wake up to the situation - more workers will lose in the long run with this stance.

[JasonA]

The UAW responded to Wagoner's announcement with an angry statement to the media indicating it would push to keep furloughed workers on GM's payrolls for the duration of its current labor contract, which expires in 2007.

That could mean that laid off workers would continue to receive most of their pay and benefits, with the plant closings providing little immediate savings to GM.

I think the UAW should wake up to the situation - more workers will lose in the long run with this stance.

Unfortunately, the UAW has all the sympathy and GM is always going to be the "bad guy", no matter what.

GM builds CARS. Ignoring everything else, it's just a vehicle. What IS a big issue is the UAW. They employ PEOPLE.

If GM engineers a bad car, it's just a CAR. If the UAW toys with labor contracts and tries to extract every last penny out of an already failing company, it's PEOPLE who lose in the long run.

But the UAW will always have the sympathy of the people at large (the public) because they're "looking out for the workers". GM will always be the antagonist because they're trying to turn the screws.

[WarrenJ]

What IS a big issue is the UAW. They employ PEOPLE.

No, except for union officers, they employ no one. GM employs people.

Regards,

Warren

[canadian95sts]

Well, GM released a plan today that will layoff almost 4,000 canadian employees, and close three Canadian plants. They are even laying off 130 employees at the St. Catherines powertrain plant. The Union however, says that the 130 jobs at the powertrain plant are safe, because they were covered by the "new contract" they signed with GM just a few months ago. All three plants are to close by 2008.

I totally agree that the UAW is a big part of the problem. IMHO Unions suck, all they do is bring down companies and protect incompetant workers. Here in Hamilton where i live, they have driven Stelco Steel into bankruptcy, that companies fate will be determined by the courts this Wednesday, meanwhile across the street, Dofasco Steel , (non union), is reporting 3rd quarter profits of millions.

By the way, it was Stelco's uncertantity that made one of their biggest clients, ( GM), choose not to renew their contract last year, and instead went to Dofasco as one of their main suppliers of steel.

Interesting to see what will follow.

Matt

[canadian95sts]

Heres and article that appeared in todays paper, quite interesting to read:

General Motors will cut 3,600 Ontario jobs and reduce its Canadian production by one-third as it struggles to stem billions of dollars in losses.

The automaker will cut another 26,400 jobs in the United States and close a total of 12 plants across North America by the year 2008.

"The decisions we are announcing today were very difficult to reach because of their impact on our employees and the communities where we live and work," said the company's chairman and CEO Rick Wagoner yesterday.

"But ... they are an essential part of our plan to return our North American operations to profitability as soon as possible."

Canadian analysts fear the massive cuts will have a "significant" domino effect on the autoparts industry.

In Ontario, the cuts include closing the No. 2 car plant in Oshawa where 2,530 production and salaried workers assemble the Pontiac Grand Prix and Buick Allure; cutting a 1,000-worker shift at the No. 1 car plant, where the Chevrolet Malibu and Monte Carlo are assembled, and closing the west portion of the St. Catharines power train plant, costing 130 jobs.

The Oshawa cuts will reduce GM's Canadian assembly capacity by one third, from 600,000 units a year to 400,000. Across North America, the company is cutting capacity by one-million vehicles. The cuts are expected to save the company about $2.5-billion US a year. In the first nine months of 2005, the company lost $4-billion US.

Beyond cost cutting, Wagoner said GM is also hoping to boost revenue with an "aggressive product assault on all vehicle segments" that will see as many as 15 new vehicles a year being introduced in North America with a special focus on hybrid and ethanol-driven cars and trucks.

Canadian Auto Workers union president Buzz Hargrove said attrition, aided by a $70,000 early retirement incentive included in the new collective agreement negotiated in September, will cover most of the job cuts. About 3,000 Oshawa workers are eligible to retire. He also promised "to fight like hell to get a new product" for the Oshawa plant.

"We've earned it. Our members have done everything GM has asked in quality, productivity and in coming to grips with cost."

Gerry Fedchun, president of the Automotive Parts Manufacturers Association, predicted "significant" layoffs in the industry as GM cuts its orders, but "it's not as bad as it could have been."

Fedchun said industry watchers had feared the loss of a GM engine plant in Windsor, as well as all 1,500 jobs at the St. Catharines operation.

"This is the sort of thing that significantly impacts industry," added Neil Everson, executive director of economic development for Hamilton. "The auto industry is part of the basic industrial fabric of Ontario. Where are you going to replace 3,600 jobs at that level of wage and benefits? They just aren't there."

For Ken Carpenter, president of Burlington Technologies Inc. and a supplier to GM, the announcement is a problem he has been preparing to meet for years by investing in flexible manufacturing technology.

"We realized we have to be very adaptable to be able to respond to the market as quickly as possible. Undoubtedly, it's going to hurt, any supplier would be impacted by this but we have some breathing room, a chance to catch our breath and pick up the pieces."

Stelco president Courtney Pratt, who recently won GM back as a customer, said he wasn't sure what effect the announcement will have on the company's restructuring. But, he said, "it sounds like it's not going to be very encouraging ... when one of your biggest customers is having difficulty, it's something you have to keep in the back of your mind."

Industry analyst Dennis DesRosiers said Canada actually got off lightly in this round of cuts.

"GM is burdened with an incredibly difficult cost structure and has to get on top of that," he said. "It had to make a significant move and Canada can't escape being part of that."

Peter Morici, economist and auto industry specialist at the University of Maryland, said GM still hasn't tackled its real problem.

"We've seen progressive cycles of restructuring at GM and Ford and there never seems to be an end to how much they have to shrink in order to become competitive. The future of the North American auto industry is really in the hands of dolts."

Ontario Premier Dalton McGuinty told The Canadian Press the government is "concerned" about problems in the auto industry and is responding with a fund which has drawn $4.5 billion of investment in the province, including GM's $2.5-billion Beacon Project.

[Ranger]

I totally agree that the UAW is a big part of the problem. IMHO Unions suck, all they do is bring down companies and protect incompetant workers.

In some cases, that is true. In others, unions are the only protection from greedy managment who believe that they, and only they, are entitled to make 10's of millions while the employees deserve little more than minimum wage. There are two sides to every coin.