Thursday, May 21, 2009
UAW doesn't want Chysler stock
It seems likely that the UAW will control about 55% of the stock of the new Chrysler entity that will emerge from bankruptcy in Judge Gonzalez's court. In the case of GM, the number will be a bit lower at 38%. So overall, the union should be pretty happy, right? Well, it turns out that there is no pleasing them:
"In fact, UAW president Ron Gettelfinger said the union hopes to sell its stake in both companies quickly because he is more interested in raising cash to cover retiree health care costs than having an ownership stake in GM and Chrysler.(emphasis added)
"'Let somebody else take the stock. Give us the money,' Gettelfinger said at a recent press conference. 'We are trading debt for equity, and what is the value of the equity? Let's be honest, it's zero today.'"
It is certainly a good thing to have one's priorities in life so clear.
Somebody is actually going to have to run the company and report to a board of directors that hopefully reflects the wishes of the shareholders, assuming that somebody wants to be a shareholder.
What does it say that the UAW wants to unload the stock -- at least some of which was basically given to it -- rather than working to rebuild the company and enhance the value of the equity, which of course would be to the union's long run benefit and the benefit of the other stockholders, not to mention the vendors, dealers and perhaps even customers.
I suppose that we have reached the final stages of industrial capitalism when a major automobile manufacturer is regarded as nothing more than a conduit for retiree health benefits.
14 Comments:
By 
Who Struck John, at
Thu May 21, 12:47:00 AM:
With the government setting the rules for running GM and Chrysler, what fool would want to be a shareholder? What greater fool would want to run the company??
By 
, at
Thu May 21, 01:22:00 AM:
Why not try to sell the stock? After all, it's "free" money.
If UAW owns 55% and they want to go on strike, who are they striking against?
By , at
Thu May 21, 02:42:00 AM:
Well, sure, Escort.
O-Bonds are worthless -- one state has said so, and other govt & corp entities are sure to follow.
It should come as no surprise that O-Stocks are seen as worthless, too.
-Ives
By , at
Thu May 21, 02:45:00 AM:
WSJ & SR, remember your Marx.
Groucho, that is.
If I were Ron Gettelfinger, I certainly would not hold any stock that would have someone like me for a majority owner.
-Ives
By , at
Thu May 21, 04:26:00 AM:
conspiracy nut mode on:
dig through FBI/CIA files until you find some major fund managers that are vulnerable to coercion. Convince them to spend their funds money rather then go to jail.
By TigerHawk, at
Thu May 21, 06:57:00 AM:
At some point in the last six months I read that the UAW's obsession with retiree benefits derives from a peculiarity of its own governance: Supposedly, retirees have much more power inside the UAW than is traditionally the case with other unions. The retirees run the show, not the current employees. Ron Gettelfinger is just a politician responding to his constituents.
By Unknown, at
Thu May 21, 09:32:00 AM:
Therein lies the problem for Mr. Gettelfinger. Chrysler's (and GM) business model is broken and will remain so after the company emerges from BK. The stock will be radioactive. What will Mr. Gettelfinger do if no one comes to his stock auction?
By Elise, at
Thu May 21, 09:50:00 AM:
Um. Mr. Gettelfinger said he wants to sell the stock and in the same paragraph he says the value of the equity is zero? All these technical economic terms confuse me sometimes but isn't he saying that he wants to sell stock that's worth zero?
If that's his idea of how to make a sale maybe it's good he's not going to be running a company that needs to actually, you know, sell things.
By Georg Felis, at
Thu May 21, 09:52:00 AM:
"UAW doesn't want Chrysler stock"
No big suprise. We don't want it either.
---The Stock Market
By Cardinalpark, at
Thu May 21, 10:56:00 AM:
Who needs the stock when you take 100% of the available "profit" for current pay for labor and for retire benefits and healthcare liabilities? Of course the stock is worthless. And now you don't need to share with the creditors...Gettelfinger has his MBA you know...
By , at
Thu May 21, 05:04:00 PM:
Someone above mentioned Marx, which prompts me to observe that under Marxist theory, the employers' union should be very pleased to run the company.
The workers are supposed to control the means of production. Wasn't that the gist of the argument? It wasn't that capital was in itself evil but rather that the evil 'Capitalists' controlled the means of production. Now that 'Labor' controls both the company and the workers, it seems they care very little about either.
By , at
Thu May 21, 06:48:00 PM:
So,did the UAW just "dis" Obama? He can't be happy with their comments.....
Susan Lee
By , at
Thu May 21, 07:37:00 PM:
So, the UAW, being the primary cause of the company's demise, is given the company, wants to sell the company, and will shake down the new owners just like they did the old owners. Good plan, that.
By , at
Fri May 22, 08:42:00 AM:
The UAW must think capitalists are idiots if they believe the new shareholders won't notice that the UAW will treat them as shabbily as the old shareholders.
Anybody else remember that other worker-owned paradise, Pan Am? I wonder what happened to them.
