GM (GM) may not get the $10 billion it needs to buy Chrysler, but, even if the Fed comes up with the money, the UAW may try to block the deal. A long strike against the companies in the current economic environment could run the union and both car firms over a cliff. The UAW and the workers it represents have lost so much over the last decade that they may not care. They will get the hell beaten out of them if the two companies combine or if Chrysler auctions itself off in pieces.
Some estimates are the GM will cut 60,000 jobs as part of a business combination.
So, the ancient union might as well make its last stand. It is not just jobs which are at stake. The US car companies have still not fully funded the UAW’s program to pay retirement pensions and health benefits. In other words, the jeopardy goes beyond the present employees at GM and Chrysler.
One question asked but never entirely answered is why the Fed would put up $10 million in the name of a marriage that would put tens of thousands of people out of jobs? The UAW has some leverage with a government agency which could inadvertently ruin the economy in certain parts of the country.
The GM deal with Chrysler will never get done. The money may show up, but the union has the power to make the risk of the deal so high that GM won’t chance it. A multi-month strike would wound the largest US car company beyond recovery.
Douglas A. McIntyre
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