The executives in the automobile industry will go to any lengths to prove what boobs they are.
GM management has elected to wait until next year before it begins to negotiate cuts with its unions and creditors. Perhaps GM chief Rick Wagoner needs a vacation after all the stress.
According to Bloomberg, "meetings with debt holders and the United Auto Workers will wait until at least Jan. 5."
The odds are that GM will not get what it needs from suppliers, creditors, and its big union before the March 31 deadline set for it to have a completed restructuring plan. Now that all the parties have seen bailout money come into the car company’s bank account, they may well assume that the new administration will not let The Big Three go under. Why make concessions now when they may not have to be made at all? Their worst case is that a bankruptcy court will give the UAW and debt holders a large haircut. In the meantime, refusing giving away what they already have is their best strategy.
The only party that will look bad by delaying negotiations is GM’s management. The federal government will fairly ask why there was any delay in getting talks going. The time is short. Vacations don’t count.
Even if nothing is likely to come from sitting down at the bargaining table, perceptions count. Angry Congressmen need a villain if they are going to help Detroit again. Management which was slow to work on solutions will be a perfect target.
Douglas A. McIntyre
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