This current economic crisis has been an enduring one. Thanks to unprecedented housing boom and then the subsequent bust, the crude oil bubble and the credit crisis. The crude oil boom was the last straw that, the once-largest US automobile company, GM was waiting for even before it was threatened by rapidly market-share-winning Japanese car models. People reduced driving living-room-sized SUV's in droves () even before the gas price hit $3 a gallon.
Now where does the great UAW fit in the picture?
You might be at haste in retorting, why the hell should I care about this damn UAW or GM. Not so fast, do not forget the well-paraphrased line from generations ago, "What is good for GM, is good for America".
Let me fit all of the above in a capsuled-sized sentence about why this topic is important for all of us. This recession has effected each one of us in one way or another.
A must read:
Where Would General Motors Be Without the United Automobile Workers Union?

Bah humbug!

"What is good for GM is good for America" is uuhiley ko kura khuiliyera gaisakyo.

Last time I checked, GM's stock was trading at below $2.  A company so laden with debt, ineptitude, dead-weight of pension and health care plan, and, on top of all that, so heavily burdened by the union's rigidity, I believe it is time for that company to go into bankruptcy.  Why should my tax dollars prop that mess up?

Bankruptcy might be the best solution for GM, despite what Rick Warner and Co. proclaims.  At least Chapter 11 will allow them to restructure their organization and debt.  So, when they emerge out of bankruptcy, they will become much leaner, much manageable, much viable company.

Back in the 70's and 80's Britain went through the same thing.  Their auto industry was in deep trouble.  They let it go bankrupt.  British brands such as Jaguar, Land Rover, etc. got picked up by foreign auto companies. The workers felt the pain initially but they got the necessary training and incentives to transfer their skills to another industry, mainly aviation a.la. Airbus Consortium.   Country moved on.

My 2 cents, if Mr. Obama is listening. 

What part is a hoax here?

Bankruptcy may be the best option for GM, to cut its ties with UAW, but what about the suppliers. Bankruptcy will also prevent the suppliers from getting paid. About 70% of the parts that make up a car come from suppliers and usually suppliers get paid in 30-60 days after a car is built. So there are billions of dollars in the pipeline that the supplier may loose.

 

If GM goes under then the job loss ratio between GM and suppliers will be about 1:4, meaning for each job lost in GM there will be 4 jobs lost at the supplier. This is what they are calling a rippling effect.

 

The best way is to find out a solution to cut ties with UAW without hurting the suppliers, and aren’t any such options.