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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (445)	6/29/1998 3:24:00 PM
From: porcupine --''''>	Read Replies (2) \| Respond to of 1722

Re: The Strike At GM: Causes and Consequences A reader writes: > .... I would appreciate a little bit of context setting before > launching into your articles. I for one, did not see the Nightline > story on the recent GM strike. It can be a little hard to follow why > you start in with: > "One guest, film maker [Michael] Moore, made the case that GM was to blame." > Blame for what? The strike, supposedly, or perhaps I am guessing wrong. > Perhaps there was picket line violence and that GM was to blame. I left it abstract intentionally. Mr. Moore is not a scholar or journalist. He is an advocate, and what he advocates is "blame" for the sake of making problems intractable rather than solvable. But, I did not want to seem to be accusing Koppel of complicity in this. I don't think he realized in advance of the show how weak a guest Mateja (who was there to supply objectivity) would be. > There have been other newsletters that start in on issues that have > been on your mind. But since they might not have been issues I had > encountered yet, or in as much detail, a little more background would > be appreciated. Generally, the tone of the newsletter sounds like > you have been mulling over some issues and then you type out some notes > to yourself. Trouble is, sometimes the notes sound exactly like they are > directed at someone that works closely with you, or even yourself, to > help > clarify or record your thinking, than they are for an uninitiated > audience. You are perceptive. Many people have asked why I write a free newsletter. Part of the answer is: precisely because it helps me clarify certain ideas for myself. In this case, I did include the URL of the Nightline episode (http://www.abcnews.com/onair/nightline/transcripts/ntl_980625_trans.html), though I now regret not explicitly labelling it as such. What you have not read are the many editions of GADR that were never completed -- in large part because so much context was supplied that the article became unmanageable. Given the scope of the subject matter, that could easily have been the fate of the letter to Mr. Koppel. By the way, this is also a problem with even Graham's most widely read book, The Intelligent Investor. It's not an entry level work. It begins by conceding that it presumes the reader's knowledge of basic investment terms -- but, in fact, it actually presumes that the reader has done a certain amount of thinking about these issues already. Reynolds Russell

To: porcupine --''''> who wrote (445)	6/29/1998 5:57:00 PM
From: porcupine --''''>	Respond to of 1722

Top GM, UAW Negotiators Meet By BRIAN S. AKRE AP Auto Writer DETROIT (AP) -- Efforts to end two crippling strikes against General Motors Corp. (NYSE:GM - news) intensified Monday after the chief negotiators for the automaker and the United Auto Workers met for the first time in more than two weeks. GM labor chief Gerald A. Knechtel and UAW Vice President Richard Shoemaker met for about 90 minutes while separate talks by local negotiators continued at each plant. Company and union officials declined to comment on details of the high-level talks. At the Delphi Flint East parts plant, the president of UAW Local 651, Danny Thetford, said the meeting between Knechtel and Shoemaker was an encouraging sign and may have led to more serious discussions in his local plant negotiations. ''It's a little bit too soon to see any results of that meeting yet,'' Thetford said. ''I am a little optimistic, however, in that we did have a lot of serious conversation about our issues today. There was a lot more dialogue than normal. That's always encouraging.'' Negotiations were to resume Tuesday morning. The strikes by about 9,200 workers at the Flint, Mich., plants also have idled more than 162,700 hourly workers at 26 assembly plants and more than 100 parts plants in the United States, Mexico and Canada. At the Flint Metal Center, a stamping plant, Local 659 President Duane Zuckschwerdt said there was no progress. He said negotiations focused on health and safety issues, subcontracting and so-called ''pegged rates.'' GM has demanded that the union eliminate pegged rates in the one area of that plant where they remain. Pegged rates allow workers to quit work after reaching a set production quota, even if time is left on their eight-hour shifts. The meeting of Shoemaker and Knechtel could be a sign that both sides are looking for a face-saving way of settling the conflict, which has idled most of GM's North American production at a second-quarter cost estimated at $1 billion after taxes. The automaker announced Monday it would continue to provide medical coverage for the nonstriking workers who have been laid off because of the strikes, but that their dental coverage would be suspended until after the dispute ends. GM had announced last week that it was canceling medical and dental coverage for striking workers. The company made the cut to conserve cash, but felt the nonstriking workers should not be punished for circumstances beyond their control, spokesman Gerry Holmes said. GM spends about $4.3 billion a year on health and dental coverage for its U.S. hourly and salaried employees. The strikes began June 5 at the Flint Metal Center and June 11 at the Delphi Flint East parts plant. They are the longest strikes at the automaker since a 67-day walkout in 1970. GM's previously scheduled two-week summer vacation shutdown officially began Monday, though most of GM's remaining operations went down over the weekend. GM executives last week ordered the layoffs of all nonessential employees, including maintenance and skilled trades workers who normally staff the plants during such shutdowns. The company's only North American assembly plant still operating Monday was Ramos Arizpe in Mexico, which produces the Chevrolet Cavalier and Pontiac Sunfire. GM said its Saturn small-car plant in Tennessee and the Oshawa, Ontario, truck plant -- the only other assembly plants that were still operating Friday -- will resume production after the summer shutdown. Most of the parts plants operated by GM's Delphi unit remained in at least partial operation Monday to provide components for non-GM customers. With the supply of key parts cut off to most of its assembly plants, GM has been seeking help from independent suppliers -- a sign that the automaker expects the strike to last considerably longer. Donna Parolini, an independent consultant who works with suppliers, said they are weary of dedicating production to GM at the possible expense of their other big customers, Ford Motor Co. (NYSE:F - news) and Chrysler Corp. (NYSE:C - news) ''I think they're going to wait until the middle of August and really look at the GM situation and try to see how they can make it into an opportunity, instead of just being used by GM,'' she said. After consolidation thinned the ranks of parts suppliers over the past several years, most are operating at full capacity. GM's need for high-volume production is too great for most suppliers to take on, Ms. Parolini said. On top of that, Ford and Chrysler are increasing their orders for 1999 model-year production, she said. GM's most pressing need is for engine parts to replace those lost from Delphi Flint East, including spark plugs, filters and fuel pumps. Before the strikes, GM's vehicle production was to resume July 13 after the two-week shutdown. But unless a settlement is reached soon, it's unlikely the automaker will be able to get its parts pipeline filled and the plants operating that quickly. Some analysts, noting how entrenched both sides have become, expect the strikes to continue until mid-August or September.