Extended strike could hurt launch of new GM hybrids
The strike that started at General Motors on Monday came at a particularly bad time for the company's new products. GM's new product offensive is getting into high gear this fall with a slew of eagerly awaited cars and trucks. Among the new vehicles that the company is just about to launch are the new Chevy Malibu (including a hybrid version), the mild hybrid version of the new Saturn Vue and, soon, the Two-Mode hybrid Chevy Tahoe/GMC Yukon. The Two-Mode hybrids are still a couple of months away and if the strike lasts long enough to affect them they could be the least of GM's problems. Hopefully the company and union can settle their differences quickly so that these important new models can come to market.
Update: Never mind. It looks it's over.
Reader Comments (Page 1 of 1)
Berkana 8:22PM (9/25/2007)
You know what? That new Chevy actually looks decent. GM's industrial design team (except for Cadillac) is starting to get a clue.
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Wildgoosechase 12:56AM (9/26/2007)
This strike is about the survival of GM, the auto workers want assurances that all new production is made in the US. The problem being is that under GM's current labor costs, they loose money on fuel efficient small cars to meet CAFE requirements and make money on SUV’s. For GM to survive California’s mileage requirement, small cars will have to be imported, no getting around it. The other option is for GM to only sell SUV’s and trucks in California once the requirements take effect. It’s not enough just to make fuel efficient vehicles, a company must profit enough to pay their pension and heath insurance obligations to retirees.
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TX CHL Instructor 7:08AM (9/26/2007)
GM's situation is pretty much hopeless without a government bailout, but the short strike (it's over already) helped GM's bottom line to the tune of several million dollars. Given that the announced (sketchy) details of the contract settlement are very close to what they already had on Sunday, I'm guessing that the 'strike' was actually a (nudge, nudge, wink, wink) cooperative effort between GM and the UAW to temporarily reduce production and save money, with the UAW membership taking up the slack with their own pocketbooks.
Not that it will help enough. GM owes more money that it can possibly pay back with profits on car sales. Only a taxpayer-funded bailout can save the company.
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rgseidl 7:20AM (9/26/2007)
@ TX CHL Instructor -
and why should taxpayers bail GM out, other than to let politicans pander to auto workers in an election cycle?
The UAW knows full well that it would lose big time if it pushed any of the Big Three into chapter 11. Retirees would lose most of all because their income and health care benefits would fall dramatically to whatever minimum government regs specify for such cases. After all, the flip side of private pensions and retiree benefits was that the Big Three never made any contributions to Social Security and Medicare.
Gettelfinger has to walk a tightrope and Wagoner knows it. If the union isn#t willing to make mor econcessions, GM has a nuclear option short of chapter 11: it could threaten to cancel the E-Flex program - or at least restrict it to overseas markets - and blame it on the cost of industrial action. Then who would have killed the electric car the second time around? I don't think the UAW wants to be accused of that given present consumer attitudes.
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beelzabush666 8:18AM (9/26/2007)
the best thing that could happen is for healthcare to be taken off the backs of employers and to be done at the federal level. The countries that are kicking Detroits ass in the marketplace have much less expensive and at the same time more effective health care systems. Universal health care will come at the behest of the corporations that run America.
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Tim 9:51AM (9/26/2007)
Apparently, GM paid the socialist’s extortion. We don't deserve to have manufacturing in the US. High interest rates, excessive regulation and unions have destroyed the US ability to compete.
I wonder what will happen once China realizes that we can't pay our debts?
We went from the world’s largest creditor and producer to the largest debtor consumer in 20 short years. We squandered our inheritance on a 20 year party and now we have to face the mother of all depressions. What a shame the dollar will collapse and no longer be the world’s currency.
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