Wednesday, October 28, 2009
UAW's Game Plan
Labor is its own worst enemy. The UAW membership are killing a plan that their leadership negotiated with Ford management that was more generous than they obtained from Chrysler and GM (courtesy of Uncle Sam and their respective perverted and politicized bankruptcies). While Ford seems to be turning around and has a decent cash cushion, it also has a pile of debt and a decreasing though still significant burn rate. This seems quite foolish on the UAW's part. If Ford continues to be at a labor induced competitive disadvantage (compared to non-UAW manufacturers and now Chrysler/GM which are partially owned by the UAW) chapter 11 is likely in its future. There is a greater likelihood by that time that some entity other than Uncle Sam will be able to provide Debtor-in-Possession financing in which case it is unlikely that the bankruptcy proceedings will be tilted to the UAW's benefit as much as they were for GM and Chrysler.