Tag Archives: bailout

Episode 30 – The GM Bridge Loan / Will Restructuring Really Save the Economy?

Winter Solstice / Christmas ’08 episode.

General Motors Logo

The Free Traders are getting the economy that they have been wishing for: cheap labor, disappearing unions, a killer trade deficit, and runaway corruption due to the lack of regulation and Laissez-faire economics.

In this episode I talk about the auto industry bridge loan and GM’s promise to restructure.  GM promises to become a sustainable American company and build “a bridge to a sustainable American auto industry”.  GM has already cut wages to $14.20 for new workers.  The number of workers at the Flint plant where my Dad worked for decades has already gone from a peak of around 6,500 workers to merely 900.  Now GM is planning more cuts, including eliminating 35% of its dealerships by 2012.  With so many people either making close to poverty wages or kicked out onto the street, there is not going to be many customers for GM’s new “green” cars.  So just how is this going to be sustainable for GM or the automotive industry?  How is this supposed to help save the economy as GM claims in their blog? You can view the “Bridge” YouTube video at http://www.youtube.com/watch?v=Rqo2uwA-_eE.  They turned off comments so no one can comment on their YouTube posts.  They also have several other posts there to review.

One thing that wasn’t so bad in the last contract negotiation between the UAW and GM was the VEBA (Voluntary Employee Beneficiary Association) solution for retiree medical benefits.  This benefited GM in that they no longer had to record retiree medical benefits on their books, as well as took retiree benefits off the table and out of jeopardy during future contract negotiations and potential bandruptcy proceedings.

Happy Holidays and I wish you the best in what promises to be a very bad new year.

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