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DETROIT (Reuters) - The board of General Motors Corp met on Sunday to review a restructuring plan intended to cut costs and win support for up to $12 billion in emergency funding from the government, a person familiar with the deliberations said.
Along with rivals Ford Motor Co and Chrysler LLC, GM is rushing to complete the business plans demanded by Congress as a condition of considering a $25-billion rescue package for the embattled industry.
A GM spokesman said the automaker does not comment on board meetings as a matter of policy. "We are moving ahead toward delivering the plan," GM spokesman Tom Wilkinson said.
Privately held Chrysler, which is owned by Cerberus Capital Management, said on Sunday its board would also convene to review its revised turnaround plan ahead of Tuesday's deadline for submission to lawmakers.
"Chrysler is fine-tuning its original plan to meet the recent request from congressional leadership," Chrysler spokeswoman Lori McTavish said. "The company's board will be part of the final review process leading up to Tuesday's submission."
Ford spokesman Mark Truby declined to comment on when the automaker's board would review the plans it will submit to Congress.
The GM board meeting came on the same day that United Auto Workers president Ron Gettelfinger signaled his union was prepared to offer further concessions in order to win support for the bailout provided management shared in the sacrifice.
"They need to establish that executive compensation is something that they're willing to curtail," Gettelfinger said in an interview on CNN. "They can also give the government an equity stake in the business."
The automakers met with skepticism from key lawmakers at hearings earlier in November and were widely criticized for flying to Washington in corporate jets.
House and Senate Democratic leaders, in a letter to GM, Ford and Chrysler executives, said the companies demanded that each submit a "credible restructuring plan" by Tuesday.
That is the same day that major automakers are expected to report bleak November sales results that show an only limited bounce from October when the consumer uncertainty and tight credit combined to send sales to 25-year lows.
NOVEMBER SALES SEEN BLEAK
November sales are expected to show the auto industry running at a U.S. sales rate of about 11 million vehicles on an annual basis, down by almost a third from 2007's tally.
Analysts see a chance for GM to stop burning cash if the industry recovers back above a sales rate of about 13 million vehicles and it succeeds with a stepped-up restructuring backed by federal funding in a deal that would involve steep concessions from creditors, executives and the UAW.
The union is under pressure to surrender protections that allow laid-off factory workers at the Detroit automakers to collect over 90 percent of their pay by shifting to a jobs bank. The union agreed to restrictions on the program.
A potentially more important concession would be winning new terms for payments by GM and other automakers into a $48 billion trust fund scheduled to take over funding health care benefits for retired autoworkers from 2010.
The revised plan GM is set to submit to Congress is also expected to show cuts to executive pay. The automaker paid its top executives more than $40 million in 2007, even as its stock dropped 19 percent and it posted a loss of $39 billion.
In addition, the GM plan is expected to indicate that the company will ask some bond holders to accept equity and a limited cash payout to redeem the debt they hold.
That proposed debt swap is seen as crucial because GM has more than $44 billion in debt on its balance sheet, analysts have said.
The automaker burned through $6.9 billion in the past quarter and ended September with $16.2 billion. It needs a minimum of between $11 billion and $14 billion to operate and pay suppliers and has warned it could fall short of cash early next year without government help.
The revised plans from all three Detroit automakers are expected to focus on their investment in fuel-saving technology and alternatives like GM's battery-powered Chevrolet Volt.
Analysts expect the automakers to detail confidential product plans that show they have a game plan for meeting federal requirements for a 40-percent improvement in fleet-wide average fuel economy to 35 miles per gallon by 2020.
Beyond that, there are separate considerations for Ford and Chrysler as their CEOs prepare to head back to Washington.
Ford is in a stronger financial position than its rivals and has suggested it would prefer to have a line of credit from the government. That would allow Ford to sidestep the issue of control of the No. 2 U.S. automaker for now.
The Ford family holds just under 3 percent of the automaker's shares but controls 40 percent of the voting power under a separate class of shares that could be endangered by a government equity stake in the automaker.
For its part, Chrysler's owner Cerberus has indicated that it needs both an alliance with GM and Ford or other automakers in addition to federal funding to survive the downturn.
Congress did not do the right thing. There should be no bailouts under any conditions.
I'll save myself the time of composing a reply because frankly Peter De Lorenzo of Autoextremist.com says it better than I could after a pot of coffee and a few hours of tapping on the keyboard.
Good rant. Question to you, will or would you vote for open voting for unions?
Annie, I'm not going to pretend to know enough on the issue to comment other than in the most general terms. Union? What's that? If this is about open balloting so the union people and employers know how employees voted, no. See, i'm in one of those Right To No Rights states so the debate doesn't reach this close to the TexMex border. However, if you can provide a few links that delve into the issue it'll be appreciated.
Concern hypocritical attitudes towards the Detroit automotive industry as opposed to the financial sector, it strike me as the views of people who see a place in the world for the US as a network of banking centers, corporate HQ,s, hotel hospaltity meeting facilities, and bedroom communities for the wider global economy. US manufacturing that cooperates with organized labor instead of busting it along with ideas that people who perform physical task are worthy of anything but table scraps are unfrienly reminders of a economy that's viewed as old hat, it doesn't fit into the global economic model.
Organized labor's top legislative priority is the deceptively-named Employee Free Choice Act (H.R. 800, S. 1041), better known as the Card Check Bill. The Chamber strongly opposes this legislation, which would upend decades of settled labor law in order to give organized labor an unfair advantage in union organizing, at the expense of both employees and employers.
Read the bills: H.R. 800 | S. 1041 (PDF)
The Card Check Bill was blocked in the Senate in 2007, but it is no secret that it will be a top legislative priority in 2009. Even now, organized labor is reportedly seeking to amass over one million volunteers to help it lobby for the bill, which, by some estimates, will more than double the unionization rate in the United States. Likewise, organized labor has made support for the Card Check Bill a litmus test for candidates that it will support in the 2008 elections. Consequently, the time is now for businesses to engage and prepare for the coming battle.
The purpose of this web page is to provide you with information and resources that you can use to educate yourself about this important issue and join the fight to defeat the Card Check Bill.
What Is the Card Check Bill?
The principle purpose of the Card Check Bill is to make it easier for unions to organize. Under current law, if union organizers collect signatures from at least 30 percent of the employees in a bargaining unit, the federal National Labor Relations Board will hold an election to determine whether to certify the union. This process, established and refined through decades of experience, carefully balances the interests of employees, unions, and employers in order to ensure that workers can hear all sides and then make up their minds and vote in private, without intimidation or coercion. Today a majority of elections are held within 39 days and a majority of union elections are won by organized labor.
Because union density has dropped so low (to about 7.5 percent in the private sector), organized labor is seeking to change the rules and make it easier to organize. The card check bill would do just that instead of determining whether a union would be certified through a federally-supervised secret ballot election, the union would be certified the moment it collected a majority of signed authorization cards. The Card Check Bill would therefore eliminate the campaign period and the legal requirements that regulate it, not to mention eliminating the ability of employees to make an informed decision in private. Instead, employee decisions on unionization would be made in front of union organizers greatly increasing the opportunity for coercion and pressure in the union organizing process.
A secondary, and less well known, purpose of the bill is to amend collective bargaining law so that when a union is recognized for the first time government arbitrators will set all the terms and conditions of the union contract unless the union and the employer can meet unrealistic timelines. Today, the law requires that the parties bargain in good faith and recognizes that the union, representing workers, and the employer are in the best position to determine whether an agreement is acceptable and whether compromising on one goal in order to achieve another is acceptable. The Card Check Bill's mandatory interest arbitration provisions would remove any incentive for the employer or the union to adopt realistic bargaining positions, as each would be posturing for the arbitrator, and would give the arbitrator control of the most basic business decisions. It would also deny employees the right to vote on ratification of the contract.
Finally, the Card Check Bill would increase penalties for employers, but not for unions or others, who violate union organizing laws.
For a more detailed description of what the Card Check Bill would do, please see:
>> U.S. Chamber Card Check 2008 Policy Paper (PDF)
>> U.S. Chamber congressional testimony
...
Showdown Looms Over 'Card Check' Union Drives
By MELANIE TROTTMAN
WASHINGTON -- While Washington debates how much unions are to blame for Detroit auto makers' woes, a broader face-off is brewing between labor and employers.
The stakes in the struggle went up Tuesday, as the U.S. Chamber of Commerce said it will spend about $10 million in the coming months to fight legislation that would allow workers to organize without a secret ballot vote. Such "card check" organization drives are a top priority of union leaders, who want President-elect Barack Obama and a Democratic Congress to enact legislation easing union-organizing rules.
Randel Johnson, vice president for labor, immigration and employee benefits at the Chamber, said defeating the measure was the lobby group's top priority in the coming session of Congress, and he described the coming fight in Congress over the issue as a "firestorm bordering on Armageddon."
Mr. Johnson also took aim at the United Auto Workers, saying the union must accept cuts to health-care and pension benefits if the unionized Detroit auto makers are to win a federal bailout.
"There's no secret about the entitlement-cost overhead the auto makers are sustaining," Mr. Johnson said. "It's got to be looked at if they're going to survive."
The auto-industry bailout, card check and other items on labor's agenda cut to a signature Obama issue: how to produce more gains for middle-class Americans, whose wages have largely stagnated during the past decade. The coming debate of worker-employer issues also will turn on questions about whether companies can be adaptable enough to compete in a global economy if they also have strong unions.
Union leaders say giving workers more power through collective bargaining and labor-friendly federal rules is critical to Mr. Obama's effort to boost the economy by raising living standards for the middle class.
Union membership dropped to 12% of the labor force last year from 20% in 1983, the earliest year that the Bureau of Labor Statistics uses for its comparisons.
"We're looking to restore the law the way it was in 1935," Service Employees International Union President Andy Stern said in a recent meeting with reporters, referring to the current card-check debate. Mr. Stern says employers want to keep their power, but giving workers an easier path to organizing will help the economy by creating a more equitable distribution of wealth. Mr. Stern points out that Federal Reserve Chairman Ben Bernanke has attributed some wealth inequality to lower rates of unionization....
The government should provide financial services to everyone as a non-profit, but highly controlled and regulated service.
YES!
If we must have a FED at all (and I suspect we need some way of dealing with the money supply) we ought to have a FED which is the LENDER to America.
Why on earth does the FED lend to banks at one interest which they get tpo lend to us at a higher interest?
Why the fuck should I have to pay a higher rate of interest just to make some fucking banker rich?
Screw that. The US bank should be the bank of the PEOPLE, not the bank of the banking class.
I think Jackson killed that, a couple times.
I think Jackson killed that, a couple times.
I think Jackson killed that, a couple times.
I'll save myself the time of composing a reply because frankly Peter De Lorenzo of Autoextremist.com says it better than I could after a pot of coffee and a few hours of tapping on the keyboard.
Detroit. The glee with which the Washington establishment - and every two-bit instant car expert who decided it was high time to weigh-in with his or her opinions - attacked Detroit and whats left of the U.S. car industry last week was a sight to behold. Everyone from chief knucklehead Michael Moore to Neil Young (Neil Young?) got on the Detroit Deserves to Die bandwagon, adding to the chaos with their naively-crafted pop logic musings and finger-snap solutions.
It was truly pathetic.
Starting with the stunningly ill-informed members of the Senate and the House lead by that raging embarrassment Dick Shelby from Alabama, who heaped derision on Detroit and its CEOs for having the temerity to ask for a bridge loan to help them through the worst financial calamity to face America in seven decades - while he conveniently forgot to mention that he helped arrange for over $650 million in tax incentives and other prizes for Mercedes-Benz, Honda, Hyundai and Toyota to build facilities in his home state - to the gang of idiots who followed him while falling all over themselves trying to demonstrate how little they knew about the car business or about the Detroit that exists today as opposed to the Detroit they once read about in the 1990s, it was a beat down of epic proportions.
That actual facts about the U.S. automobile business and its role as an essential part of the manufacturing fabric of the country were in short supply in the rote speeches made by the representatives and senators - and except for exactly one, Representative Thaddeus McCotter (R - MI), they were totally predictable. And so was the piling on that ensued.
By the end of last week it was as if the domestic automakers were not only the scourge of the Western hemisphere but responsible for all known troubles afflicting this country at this very moment, its CEOs were idiots, wed all be better off as a country if its founding city was just wiped off the American landscape along with the rest of the midwest, and gangs of citizens were assembling with pitchforks demanding bankruptcy for the Detroit Three. I was actually surprised that the mob mentality stopped short of demanding the heads of the CEOs from Chrysler, Ford and GM or anyone else representing Detroit on sticks - the loathing was so far off the charts and unwarranted.
It would have been difficult to comprehend all of this if had originated in any other city besides Washington, D.C., After all, this is a town whose very existence is based on cronyism, perks, earmarks, lobbyists and professional self absorption. But even that pales in comparison to the real pro sport in Washington, which is The Blame Game. The fact that these politicians made hay on the whole corporate jet angle was laughable, especially since one of their esteemed colleagues Nancy Pelosi caused a royal stink when she became Speaker of the House by demanding a bigger government plane so that she was able to fly non-stop back to California. That many of these politicians eagerly accept rides on corporate jets from various contributors and lobbyists was a story that was missing in the gathering chaos of the lynch mob mentality aimed at the Detroit Three CEOs, as if they were the only heads of corporations on earth who use corporate planes. And the establishment media, ever in search of a fifteen-second sound bite, found what they were looking for and dutifully reported that angle as the meat of the story.
Lost in all of this, of course, was the fact that the backbone of the U.S. manufacturing sector was on the ropes because of the worst financial crisis since the Great Depression. But nonetheless, the real issues at hand were instead drowned out by the verbal jabs and cackles about corporate jets, and the Detroit Three CEOs were sent packing, but not before they were admonished like little school boys and told to bring back a real business plan for their $25 billion, and to come back better prepared as President-elect Barack Obama chimed-in on Monday.
Oh really?
This after Citigroup, which only a month ago received $25 billion, was blessed with another $20 billion this past Sunday evening, and, as part of the plan, Treasury and the FDIC will guarantee against the "possibility of unusually large losses" on up to $306 billion of risky loans and securities backed by commercial and residential mortgages.
What, no hat-in-hand journey to Washington for Citigroup CEO Vikram S. Pandit so he could receive a good old-fashioned ass-whipping for bad management decisions, marketing risky financial instruments, failing to anticipate dramatic shifts in the market and piss-poor planning in general on live television?
No stumblebum senators and congressman tripping all over themselves to demonstrate their complete lack of understanding of the nations financial system or to criticize the fact that Pandit used the corporate jet to fly down to Washington?
No recriminations for Robert Rubin - the most prominent member of the Citigroup's board of directors and a former treasury secretary - who was one of the chief architects of the banks risky investment strategy, and who pulled down $62.2 million between 2004 and 2007?
And what about the go-along-to-get-along dimwits on the Citigroup board? The gang that J. Richard Findlay, head of the Centre for Corporate & Public Governance, described for the New York Post thusly: "Citigroup's board of directors increasingly resembles a first-class sleeping car on a train wreck that just keeps happening. Almost whatever it does, it is too slow and too late. It can take months for Citigroup's directors to clue into what others in the real world have known for some time."
And why does Citigroup merit bailing out again with no explanation whatsoever to the American taxpayers other than President Bush saying, "We have made these kind of decisions in the past. We made one last night. And if need be we will make these kind of decisions to safeguard our financial system in the future."
Oh really?
Whats going on is the activation of a New American Double Standard, one that goes something like this:
Washington to Detroit: Drop Dead.
Washington to Wall Street: Who do we make the check out to again?
Thanks to our representatives in Washington, an industry that powered this great nation into the future, which basically created a viable American middle class, and which created the Arsenal of Democracy so that the nation could be properly equipped to win WWII, has all of a sudden become a national punchline and a burden to the rest of the country.
An industry thats responsible either directly or indirectly for one out of every ten jobs in the nation, an industry thats inexorably linked with the manufacturing base of this nation and whose failure would send this nations economy reeling, was basically sent packing in search of a plan while Wall Street and the banking system was given carte blanche just for showing up.
How do we know that Citigroup wont crash in a few more months and need even more money? And how will they handle their emergency need by then in the new enlightened Obama Presidency? By email?
Whats wrong with this picture?
Why is it politically more expedient to trash Detroit and the entire domestic automobile industry than it is to shine a harsh light on the glorified pyramid scheme that propelled Wall Street and the banking system to new heights and now to horrific lows while screwing over millions of Americans in the process?
The fact that President-elect Obama added to the criticism of the Detroit Three CEOs by echoing the same misinformation spewed by the senators and congressmen last week in Washington was not exactly an uplifting development either.
"We can't just write a blank check to the auto industry. Taxpayers can't be expected to pony up more money for an auto industry that has been resistant to change. I was surprised that they did not have a better thought-out proposal when they arrived in Congress," Obama said on Monday. "Congress did the right thing which is to say, 'You guys need to come up with a plan and come back before you're getting any taxpayer money.'"
Oh really?
But we as American taxpayers - can expect to keep writing blank checks to mismanaged banks and failed Wall Street conglomerates, and be expected to pony up more money to an industry thats resistant to change, with no thought-out proposals of any kind and no real plan in sight? How does that work, exactly, Mr. President-elect?
As if to back-pedal a bit, Obama added that, "We can't allow the auto industry simply to vanish. We've got to make sure that it is there and that the workers and suppliers and businesses that rely on the auto industry stay in business."
Oh really?
Then why is it - Mr. President-elect - that youre endorsing the miserable performance put on by our so-called leaders in Washington last week? Why is it that youre regurgitating the same tired inaccuracies about Detroit that we were subjected to for two days last week? Do your homework, Mr. Obama. Stop listening to the media or the sycophants youve already assembled and dig deeper into this Detroit thing before you start sounding like all the rest of the less than gifted in Washington.
Memo to the old and new Washington establishment:
A large number of American citizens are painfully aware of the hypocritical double-speak thats currently festering in the halls of Congress and on the Senate floor.
A large number of Americans are tired of the now-tedious stereotypes and flat-out untruths being bandied about in Washington about an industry thats vital to the long-term health and well being of the nation, an industry that actually creates and builds tangible hard goods, an industry that devotes $12 billion a year in advanced technical research that benefits the entire nation, an industry that is a fundamental part of the American industrial fabric, and an industry that employs millions of Americans all across this nation.
A large number of American citizens are tired of this New American Double Standard, where the financial well being of millions is being held hostage and being put at risk for the benefit of a few with no explanation, no plan and no accountability whatsoever.
Detroit may be Washingtons whipping boy du jour, and our esteemed representatives may want to continue on with their witch hunt whats next, will they demand that the Detroit CEOs bring their college transcripts with them next time? but they wont be fooling anyone.
Its not about whats good for the rest of the country in Washington. Its not about nurturing the American fabric, or protecting the foundation of our manufacturing base, or taking care of a productive national industry that creates real American jobs, or keeping the nation as a vital player in the global economy.
No, not even close as a matter of fact.
In Washington its about whoever is greasing the skids or blowing in a Senators or congress persons ear just right. And the Motor City finds itself on the outside looking in.
Detroit might as well start writing its own obituary right now, because even if some sort of financial bridge loan package is grudgingly bequeathed, the strings and built-in entanglements are likely to choke the life out of the U.S. auto industry once and for all.
Thanks for listening.
