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LOST SOL
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Discussion Starter #1 (Edited)
More bad news for GM (employees) :(
By DEE-ANN DURBIN,
AP Auto Writer




General Motors Corp. and the United Auto Workers have reached a tentative agreement that will help the embattled automaker lower its health care costs, GM's chairman and CEO said Monday.

The announcement came as the world's biggest automaker said it lost $1.6 billion in the third quarter and said it was considering selling a stake in its financial services arm in a bid to restore its investment grade credit rating.

Its shares rose $3.14, or 11.2 percent, to $31.12 in premarket trading.

The tentative agreement on health care is projected to reduce GM's retiree health-care liabilities by about 25 percent, or $15 billion, and cut GM's annual employee health-care expense by about $3 billion, CEO and Chairman Rick Wagoner said. Cash savings are estimated to be about $1 billion a year.

"These negotiations were done in a positive, cooperative, problem-solving spirit," Wagoner told employees at GM headquarters in Detroit. "While it may have taken some time to reach this cooperative solution, I think it was time well-spent."

GM asked the UAW to help it lower its health care costs before its contract with the union expires in 2007. Both parties have been in negotiations since spring.

Also Monday, GM reported a loss of $2.89 per share for the July-September period in contrast to a profit of $315 million, or 56 cents a share, a year ago.

The loss for the third quarter included a charge of $805 million for asset impairments in North America and Europe and restructuring charges of $56 million at GM Europe.

Without the special items, GM's loss amounted to $1.1 billion, or $1.92 a share. But that is still a much larger loss than the loss of 87 cents a share that analysts surveyed by Thomson Financial expected.

Total revenue was $47 billion for the quarter, up from $44.8 billion in 2004.

The tentative health care agreement with the UAW also includes contributions to a new, independent voluntary employee benefit plan, which will be partially funded by GM.

Wagoner said the modified plan will continue to provide high-quality health care for GM's more than 750,000 hourly workers and dependents, retirees and surviving spouses in the U.S.

But he acknowledged that the decisions will have an impact on employees.

"We will do our best to minimize this impact on each of you and your families," he said. "We hope you will understand that, with these difficult actions, we will help to ensure a viable and growing GM for the future."

GM expects to spend $5.6 billion on health care this year.
 

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I don't think GM is the only one hurting on Health Care costs. The company I work for said that for the first time in history of the company, their cost for our health care will be more than our wages. This is really getting out of hand like other things in this world.
 

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It's good to see GM and the UAW have been able to come to a mutually acceptable agreement. :thumbs:
 

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who ever was that forum member on here who was going to buy GM stock on the cheap 2 weeks ago, congratz! You just paid for your solstice if you sell tomorrow!
 

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Discussion Starter #5
I guess that if you can sell people that 1.6B is not too bad of a loss, then things cannot get any worse ... ;) :confused: :lol:
 

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all this means is that the gm execs will be able to use the money they saved on health care to give themselves a nice bonus check this year.
 

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Discussion Starter #7
deacon said:
all this means is that the gm execs will be able to use the money they saved on health care to give themselves a nice bonus check this year.
:agree: This might be the reason that some of their folks have been leaving. :confused:
 

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I keep thinking that one of the purposes of the "Employee Pricing" campaign was to create enough short-term debt to be able to pressure the UAW into concessions. Yes, it cleared out the old inventory but it also created losses on most vehicles. Then when they extended the program 3 times, I began to realize if it wasn't a strategy to generate big 4th quarter losses so they could go to the UAW and say, "See, we are on the verge of bankruptcy here - you better give in."

Now I won't even say if it was good or bad, or who has the moral high ground. I am just wondering if the losses incurred by the Employee Pricing promotion were not designed PRIMARILY to force the UAW into making concessions.

Just a thought.
 

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My guess is that the Delphi bankruptcy had more to do with getting this deal done than GM's losses. Fact is, the UAW has seen GM cycle through losing big money and making bigger money plenty of times.

The impending failure of Delphi has done more to make the point that this is not 'business as usual' far more than losing a billion (or three). :leaving:
 

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General Motors Corp. and the United Auto Workers have reached a tentative agreement
My understanding is that there is still a 50-50 chance the rank and file will not approve the agreement. It ain't over untill it over.
 

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The Delphi bankruptcy is very disturbing to the GM workers. If Delphi is successful in making large, unilateral cuts to benefits and base pay, you know GM execs will be taking notes and preparing just in case they cannot quickly turn their own bottom line around.

LBJay said:
My understanding is that there is still a 50-50 chance the rank and file will not approve the agreement. It ain't over untill it over.
Yeah, I saw some stuff today that indicated that it may be very tough to get this by the rank and file. This issue may not be over with quite yet.
 

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Fformula88 said:
The Delphi bankruptcy is very disturbing to the GM workers. If Delphi is successful in making large, unilateral cuts to benefits and base pay, you know GM execs will be taking notes and preparing just in case they cannot quickly turn their own bottom line around.



Yeah, I saw some stuff today that indicated that it may be very tough to get this by the rank and file. This issue may not be over with quite yet.
If they don't approve it could cost them more in the long run. Including their jobs.
 

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Editguy said:
If they don't approve it could cost them more in the long run. Including their jobs.
Since when has that stopped unions from remaining inflexable? They will shoot themselves in the foot from time to time.
 

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Fformula88 said:
Since when has that stopped unions from remaining inflexable? They will shoot themselves in the foot from time to time.
Oh, I agree. Sometimes people just can't see the handwriting on the wall. The fact is that GM and Ford have to begin levelling the playing field or they won't have a future. I understand that giving up wages an benefits is a difficult thing to do, but even with concessions these will be very good jobs.
 

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Editguy said:
Oh, I agree. Sometimes people just can't see the handwriting on the wall. The fact is that GM and Ford have to begin levelling the playing field or they won't have a future. I understand that giving up wages an benefits is a difficult thing to do, but even with concessions these will be very good jobs.
Making smaller, gradual concessions now to ensure the jobs are still there down the has certainly got to be better than having a large, forced concession put on you like the Delphi workers might suffer.
 

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Fformula88 said:
Making smaller, gradual concessions now to ensure the jobs are still there down the has certainly got to be better than having a large, forced concession put on you like the Delphi workers might suffer.
Exactly. And real job security comes from a healthy company.
 

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Editguy said:
Exactly. And real job security comes from a healthy company.
:agree:

But that is EXACTLY the opposite of what the UAW has cared about from day one. With most unions (UAW), job one has long been all about what they can extract from the company in the short run. Show me one automotive contract that didn't cut the throats of future employees at the expense of current workers.

This is the part that really burns me :cuss: about the UAW (Steel workers too), these bloated, lazy bastards screwed their own kids out of the chance to have the same kind of life they enjoyed. My brother does essentially the same kind of work my dad did (in fact, one of the parts his shop makes is used by my dad's old plant - was probably even made there years ago) - but there's virtually no chance of him ever making that kind of money - now that job is outsourced to a non-union shop.

This attitude is part of why I find it hard to have a whole lot of sympathy (I do have some) when these pension funds go belly up. Instead of trying to protect some lazy workers cushy job, making sure the members' pension funds were fully funded should have been one of their top concerns.

:rant:
 

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Discussion Starter #18
That is also one of the reasons you see more plants opening up down in the South. In Alabama we have Mercedes, Honda, and Hyundai.
 

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MAKsys said:
This attitude is part of why I find it hard to have a whole lot of sympathy (I do have some) when these pension funds go belly up. Instead of trying to protect some lazy workers cushy job, making sure the members' pension funds were fully funded should have been one of their top concerns.
Keep in mind, when you are placing sympathy, that the union is not always doing what their rank and file thinks is best. I work at a job that is covered by a union too, and the union is often acting in ways other than what most of us feel is our best interest. The problem here is that the union has a management structure, sort of like a business. The top people in the union have a tendancy to decide what is right for everyone, regardless of what everyone thinks is right. It can vary depending on the union, but I bet there are plenty of UAW workers who would have rather tried to reach a deal with Delphi than see them go bankrupt (for instance). However, UAW management probably thought it was better to put up a hard fight, so they do not encourage GM, Ford, Chrysler, etc to try a similar tactic in forcing concessions.
 
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