GM And UAW Start To Trade Horses

Now that it appears that there is a good chance that the UAW will accept a transfer of funds used to cover healthcare from the Big Three to the union. the real dealing is starting to begin in the labor negotiations.

According to Bloomberg, GM (GM) is now asking for new employees to take 401(k) packages instead of fixed pensions. It is also saying it cannot afford annual cost-of-living pay increases. Bloomberg writes "the biggest U.S. automaker wants to scale back three landmark gains by the UAW in the past half- century: a fixed pension, company-paid health care and an annual cost of living raise."

If the UAW would agree to these terms, which is hardly a sure thing, it would want one thing in return–job guarantees. It is not an unfair request if it is willing to take share cuts in member benefits.

But, in saying it will guarantee a fixed number of jobs, GM is taking an awful risk. With domestic auto sales falling and market share moving to the Japanese, the largest US automaker may find itself with employees it does not need or want.

There is no"right sizing" GM until it shows it can stop the drop in its US market share

Douglas A. McIntyre