GM and CAW reach agreement

Its hard to say without seeing any detail at all. But I'm surprised it wasn't much worse.

If I understand correctly, the governments have agreed that bailout money will go to the pension underfunding. I'd say that's a heck of a lot better than the UAW pension fund getting GM stock for their shortfall. But I could easily be missing something.

The benefits that existing employees get also struck me as being less of a hit than what the UAW accepted- though that is difficult to compare.

Either the CAW was right that the all in hourly labour costs that others were waving around were incorrect, or management made a decision that up to a point how far the union wanted to go in cutting hourly costs was up to them.... because the elephant in the room is not the comparison to Toyota labour costs [which is an abstraction], but the comparison to cost cuts the UAW would agree to. In other words: "if you want to take your chance that your labour costs are OK for when it comes to rounds of factory and line closing decisions... thats up to you."

Well,  we ratified with over 80% in favour.  Like the G.M. deal, there's a five year freeze on the indexing of the pension.  Wage freeze. Co payments on prescription drugs, but capped. Lost semi-private hospitalization.  A week's holidays for two years. And everyone stays on a defined pension.

All things considered a pretty crappy contract,  but a damned fine one under the current circumstances.

So, this is out of the way.  Now, it would be nice if the fine people down at Service Canada started paying us work share.  They are approaching, what, six weeks late now.

Yes.  It's a pretty successfull program, actually.  I think the Obama administration is looking at implementing it in the States.

What a disaster for the workers, a $15 to $16 dollar an hour wage cut! And that's on top of the previous $7 dollar/hr wage concession. The perpetrators of financial 9/11 in North America are laughing all the way to the bank.

Keep voting Liberal and Tory!! The workers will get more of the same anti-worker agenda from the two old line parties and weak unions. 

[url=http://www.cbc.ca/canada/story/2009/05/24/gm-caw-vote.html]The CBC reported:[/url]

Quote:

Specific details of the overall deal were not immediately known, but Lewenza said it delivers a $15 to $16 reduction in the average per-hour wage of GM's Canadian workers on top of a previously negotiated $7 cut.

So altogether the CAW and membership, McGuinty and the Harpers agreed to a $22 dollar wage cut. And that's if the bondholders go along, which they more than likely will not.

I think youve finally lost your mind.

"...wages and pension benefits are protected..."

"...a $15 to $16 reduction in the average per-hour wage..."

They seem to be having it both ways here.  And it looks like GM will declare bankruptcy by June 1st, which will trigger new contract negotiations, more concessions...

I think it's taken out of the total workforce payroll, including benefits. Total concessions equalling $15 or $16 dollars an hour. I dont know what the final average pay cut might look like on every pay cheque. Do you?

I think when youre reduced to being a slavish apologist for the two old line parties, it's time to cash out. Objectivity is absent at that point.

Fidel wrote:

I think it's taken out of the total workforce payroll, including benefits. Total concessions equalling $15 or $16 dollars an hour. I dont know what the final average pay cut might look like on every pay cheque. Do you?

"You" being Unionist. And to answer your question, he does know, and already told you: no wage cuts.

Its not the English.

Its your tendency to read in what you want to see [for who knows what reason].

"Tentative" refers to the agreements with the CAW and the UAW. All agreements are tentative until the union members vote approval. "Tentaive" has nothing to do with the bondholders.

And the other things you highlighted referr to the uncertainty as to how things witll unfold for GM viz the bondholders. The agreements with the UAW and CAW stand regardless of how that shakes out.

And no, they won't be back to the workers next month for more.

Done deal.

If I was trying as hard as Fidel to prove some convoluted point, I'd probably be confused to.

But go for it if others have honest questions about how some of this works, or the power dynamics involved, what ever.

[url=http://globalresearch.ca/index.php?context=va&aid=13703]On Obama's Chopping Block:[/url] It's The Turn of General Motors The greatest single attack on American workers since the Great Depression

Quote:

The alarm bells should be ringing day and night about what's being prepared at General Motors - the ripple effects could produce tidal waves.

The Obama administration has made no secret about its plans for GM: the Chrysler bankruptcy was the "test case," and now Obama's Wall Street buddies inside the Auto Task Force plan to replicate it.  The vast implications of the Chrysler bankruptcy went unnoticed by the mainstream media, concerned as it was with the convenient hype provided by Swine Flu. . .

 

Why was Chrysler so important?  Most significant was the fact that workers were scared into accepting large wage and benefit reductions. They were told by the U.A.W. "leaders" that, unless workers conceded to accepting the wages and benefits of non-union workers, bankruptcy would be unavoidable.  The workers conceded, and the very next day it was announced that the company was headed towards bankruptcy.  It is unimaginable that Gettlefinger and the other U.A.W. leaders did not know this was coming, since they spend considerable time back-slapping with Obama. 

This is but one of a long list of treacheries provided by a Gettlefinger-led U.A.W. and his obsession with making GM a better "global competitor."  Just as in 2007, autoworkers were scared into making drastic concessions to "save jobs," and soon thereafter jobs were slashed by the thousands.  . .

 

Also, GM will likely be split into two companies: one that will build cars with cheap labor for the world marketplace and the other consisting of factories and machinery that will be sold for scrap metal. Instead of this tremendous productive power being used to create a much more rational mass transit system, the company is downsizing itself, laying off thousands of workers and filling landfills.

Liberal fascism and weak labour unions go hand in glove.

KenS wrote:

Not only knew bankruptcy was most likely coming, but negotiated on the basis that it would. And, as with the CAW, the UAW membership was well aware of that.

Regardless, bankruptcy is inevitable.  All this can possibly do is delay things a few months.

Are you referring to the US workers end of the deal- the UAW and GM?

Thats what they are talking about. The bondholders are on their owwn- isolated- and have nothing to do with the CAW or UAW agreements.

And even with them, nothing has 'fallen through'. The bondholders debt was going to be restructure one way or the other. If enough of them accepted the debt exchange offer, there was [probably] no need for bankruptcy. If they didn't, its bankruptcy. Their leverage was that bamkruptcy is disruptive, so they can aspire for a better offer so that GM doesn't have to go into bankruptcy. Failure to bring the bondholders in voluntarily has been expected for some time... the only thing to fall through was the unlikely last ditch attempts to stave that off.

I guess people persist in this idea that bankruptcy or not is some black and white thing. At least in this case, you need to think of bankruptcy as just one form that restructuring can take. "Restructuring" being a negotiation circus where the players jockey for getting less of a haircut. Chapter 11 bankruptcy is the default process if everyone does not voluntarily agree.... which is almost inevitable that not enough of the diverse bondholders will agree voluntarily.

Thats actually fundamentally wrong, even as a general statement.

And if you followed the news on the Chrysler and/or GM restructurings even occassionaly, one owuld know it definitely is not true in this case.

Bottom line [and general point]: the bankruptcy court decides who is going to get what in any bankruptcy... and the room for his/her judgement is all the greater in a Chapter 11. And in a Chapter 11 the debtor-in-possession [the one(s) providing post restructuring financing goes straight to the top of the list]. On top of that, the pecking order gets rearranged according to the needs of the business continuing to operate. And since if there are collective bargaining agreements, the reorganized entity needs to negotiate new contracts to continue operating, this means that in practice, workers and their pension and benefit funds are not just another creditor in the line. Since they are unsecured, if it depended on that they'd get pennies on the dollar. But they have leverage to at least move up past a lot even of the secured creditors as to negotiating clout for how much of a haircut they have to take.

All sorts of contracts- including collective bargianing agreements- are renegotiated before a Chapter 11 filing. Technically, they have no binding force. But since all the elements of the package depend on each other- including the vital debtor-in-possesion financing, all the contracts get honoured unless the secured debtholders can prove that they would have got more if a break-up liquidation would have gone through. And for that they have at best a very uphill battle. But some of them always try- for blackmail leverage if nothing else.

So all of that is true to at least some degree in any case.

And in these cases- the prospective debtor-in-possession just happens to be the US government. Which leaves little room for anyone to balk at their diktat. Both the UAW and CAW were subjected to it. But that had far more leverage- financial let alone political- than do the debt holders.

There is nothing you just said which is contradicted by my explanation.

People are stuck on what they hear about the very general overall ideal principle of bankruptcy, as if that applies equally to Chapter 11. Your first post was an example of that.

abnormal wrote:

The question in bankruptcy is where the bondholders sit in the pecking order of security (i.e., who gets paid first).  I honestly don't know how senior GM's debt is but, on the assumption it's at the top of the pecking order, the bondholders will get paid first and what's left over will be available for running the company, pension funds and so forth.

 In light of that explanation about Chapter 11 in general, and the auto companies in paricular: "what's left over will be available for running the company" is just dead wrong when it comes to Chapter 11. [And the business/legal logic is that even the most senior debt holders get pennies for the dollar if a company is liquidated, while a running company can pay back a higher portion of the debt.... and to do that, operating funds have to come before debt repayment.] On top of that "what's left over will be available for... pension funds" is wrong in practice. [The workers being part of the 'operating needs' as well as (very junior) debt holders.]

The rights of the first tier debt holders does give them the means to slow up the process. But they are fighting a very unlikely rear guard action. "Were" actually: the case of the pension fund Chrysler debt holder was rejected 2 days ago.

And obviously 'senior debt' is worth more than 'junior debt'... that isn't the point. You have fetishised the primacy of senior debt. As the process has unflolded we have seen how incredibly contingent that primacy is... and was predictably so before the restructuring process started. I said as much in forums here at least a couple months ago. Got the same persistent insistence then that the senior debt holders have all the cards, bit more surprising to hear it now.