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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: J.B.C. who wrote (406135)	1/23/2011 12:01:05 PM
From: Katelew	1 Recommendation Read Replies (1) \| Respond to of 794247

Truthfully, I could be on a rather thin branch here in some of my statements, because I honestly don't know enough about the GM situation. I probably should hush up and read more. I'm not sure how the older and retired union employees of GM made out. I did read this not long ago, though. Apparently new UAW hires are coming in with a starting salary of $14/hour versus $28/hour previously. They also are being given a reduced benefit and pension package relative to previous hires. These are sharp cuts, so obviously unions are capitulating. My sense of things is that this kind of capitulation is happening throughout the world of unionized employment. New hires among teachers, police, etc. are coming in under different contracts, too. There's a giant reset of the wage and benefit structure in this country going on. Two tiers are forming. Happening in Europe, too. New hires are looking at a totally different landscape.

To: J.B.C. who wrote (406135)	1/23/2011 5:16:03 PM
From: rich evans	3 Recommendations Read Replies (3) \| Respond to of 794247

Frankly, I would not reach any conclusions expressed here by anyone. You need to have examined the Bankruptcy Filings by GM and the Proceedings. You have to understand Debtor in Possession Financing. The superior position of the Government which gave such financing, why no one else did or could. The Senior Bond holders had security in a bunch of worthless plants. The Government had the inventory and AR. The Government bought the good assets under a conwtested 363D proceedings free and clear of all liens. There was an army of lawyers arguing everything. The Judge applied the Laws of BR. The Bondholders did not have to agree to take 10% of the new GM. They could have had their security which would be the old plants which were a liability and some of the proceeds from the 363D sale after the Government got paid back its first priority DIP Financing. The Unions negotiated also to get about 16% of the New GM instead of their priority unfunded pension obligation which was much larger then the senior bond holders. The Government would have had to pay the pensioners anyway under the Pension Guarantee Board so it was just a question of which pocket. No one got paid off. It was all hard bargaining. If the Unions went on strike , GM was toast. They had both financial and employment leverage. So that is the way of BR and it ain't easy. Rich