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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Alighieri who wrote (482282)	5/20/2009 6:38:59 PM
From: TimF	Read Replies (1) \| Respond to of 1573683

How does union ownership hurt the company? I didn't say union ownership hurt the company (although it might), but that giving the union (a junior creditor) a smaller hit than the senior debt holders hurts the company. It does so in two ways. 1 - If the union takes less of a hit, that means that employment costs won't go down or won't go down as much, increasing future costs. 2 - If senior debt is treated as junior to the unions, than future lenders will likely charge higher interest rates. Senior lenders accepted a lower return in order to be senior to others should things go wrong. Yank that away and you won't get that lower demand for return any more.