UAW “Pattern Contracts” and Ford – one of the fundamental concepts forced on the big 3 was the same contract would apply to all 3 companies, so the companies could not try to split apart the UAW into factions based on the company. Each contract cycle, the first company that “settled” with the UAW then became the pattern that was forced onto the other two companies. Because GM was typically the most profitable, GM would compete to get the UAW to strike them, so GM (known locally as Generous Motors) would dole out generous concessions, that would then cobble Ford and Chrysler with high costs they couldn’t afford and be competitive..
Now the shoe is on the other foot – the UAW made concessions to help “save” GM and Chrysler, and Ford is insisting that the UAW Ford workers agree to those same concessions so all 3 companies are working from the same contract. The UAW voted this weekend and said “No”. Keep in mind that GM’s largest stockholder now is the UAW retirement fund. The union being both labor and management/owner at GM is going to have some really odd consequences.
(the Canadian UAW did approve the concessions, which could motivate Ford to move more of its operations to Canada if the US UAW holds firm)
foyle 11:03 pm on November 6, 2009 Permalink | Log in to Reply
3 more banks now closed as of 10pm est. 120 total for 2009 thus far.
Art Stone 11:27 pm on November 6, 2009 Permalink | Log in to Reply
Reading the list, the FDIC now seems to be shifting the problem into the future by entering into “loss sharing” arrangements. As I think I understand it, the idea is the bank “taking over” gets a loan portfolio (or other assets) and a promise from the FDIC that if in the future some of those loans “go bad”, the FDIC will make up most of the loss (typically 80%)… if the loans don’t fail, then the buying bank is that much ahead (the FDIC doesn’t share in a gain)… the “starting point” of determining the loss is based on a guess of the future default rates of the portfolio. This keeps the risk away from the buying bank, but doesn’t require the FDIC to sweeten the deal by giving the buying bank the cash today.
Don’t solve today what you can put off until tomorrow…. the market has to come back eventually, right?