December Stock Talk I

Yeah as a matter of fact I do...and it was and is a sweet deal for the workers, but laughable business model.

The Big Three automakers are forced to pay 85- to 95-percent of union wages and benefits to members of the United Auto Workers union who aren’t working – even if their plants have been closed.
 
Industry analysts say union labor agreements that obligate the Big Three to pay millions of dollars to workers who are no longer working are a major reason why the automakers are in trouble – a problem that no short-term bailout can fix.
 
During hearings last week where the chief executives of Ford, Chrysler and General Motors appeared before the Senate Banking Committee, Sen. Bob Corker (R-Tenn.) raised the issue.
 
Corker asked Rick Wagoner, CEO of General Motors, why with all of the measures he has taken to prevent a collapse, his company was still not making money.
 
“Is it because of the (United Auto Workers) union?” Corker asked pointedly.
 
Wagoner, who demurred from answering directly, said that even at plants that are closing, “85 percent” of union employment benefits still “have to be paid.” He said that GM has had to restructure and reduce the cost of operating in the U.S., but the company still pays for employees that are not currently working at “idle facilities.”
 
Chrysler Chairman Robert Nardelli, facing a similar question from Corker, confirmed that “agreements are in place” between Chrysler and UAW that, regardless of demand, Chrysler must still operate at a pay rate of 95 percent of wages for employees not currently working at idle facilities.
 
Peter Morici, a professor at the University of Maryland’s school of business, told CNSNews.com that one of the biggest problems the companies face is the UAW’s Jobs Bank – a program established more than two decades ago that guarantees nearly full salary and benefits to out-of-work employees.
 
“Right now if a plant closes in St. Louis and a new one opens in Kansas City, the workers don’t have to move from St. Louis to Kansas City; they can opt to get a $105,000 payout or go on Jobs Bank where they can collect 95 percent of pay for the rest of their lives,” Morici said.
 

That is absurd.

So keep the workers around for peak periods by still paying their wages but not working?

Something tells me if they needed extra capacity, they could hire temp workers or contract it out.

The issue runs deeper, the way these companies operate and manufacture is flawed, their business model is flawed.

Companies that cannot compete and have inefficient operations should not stay in business.

The UAW needs to be shut down and I hope if we do offer assistance from the government that the agreement with the UAW is dissolved and that no union agreement can be made for a span of time.

What needs to happen is the companies need to be gutted from the union to the layers of management, and I just dont see that being plausible..so let them go under.

Hydrogen cars are the car of the future for sure.

I think the dollar goes up to break new levels here before too long.

Hat,

Hydro cars are not priced competively enough and the powering source has to be built out..so I dont see that happening.

July, it is not a dead horse, it is yet another sign of inefficiency and there are more where that came from. The UAW is controlling these companies and making them incapable of being profitable and plausible as long term businesses. You just cannot ignore these bad practices and dismiss them because it was caught and exposed, that is what is wrong with these firms.

I dont see much worth salvaging at all, they make a bad product at a bad price. Their plants are inefficient, there are too many layers of management. Businesses like this just dont make it and I dont see why we need to coddle a bad business? These automakers need to either go under or go under a complete overhaul which means management implosion and dissolving the UAW completely, and that is just a start.

I see zippo in the market which has short term value, plenty long term..if you have a horizon there are so many bargains out there it is crazy.

This blip just in, the WSJ quoting that the Fed wont entertain bailout deals for the automakers..

Hit the wire 3 minutes ago.  

Agreed totally..

Seems like a GREAT play to me.

Wow..

Went from almost flat to -200 in minutes.

UAW saying one of the big 3 might go down this month..poor stockholders are going to get screwed.

Not to be argumentative but they can't even build a good car (some of it has to do with legacy costs) which they are supposed to do and you want them to survive long enough to build green energy products.  they should have done that 50 years ago not now.

Dodd made the same comment yesterday about the Big 3 making trains and other mass transit products - where are they going to find the money to do that much less the time to develop a product and get it out on to the market before they go bankrupt. 

They are car company - they make crappy cars and good SUV/trucks - thats it.  It is like when congressman were upset at the CEO of ExxonMobil asking him why he doesn't devote more resources to alternative energy and he said "because I run an oil company not an alternative energy company"

The big 3 would get their lunch handed to them by GE if they tried to compete in the wind turbine business.

Worth a look and a laugh

https://www.youtube.com/watch?v=bNmcf4Y3lGM

How does this stock move in correlation to oil futures?  Was trying to calculate it out each day and was having trouble recalculating its correlation. 

According to the summary, DXO seeks to track 200% of the Deutsche Bank Liquid Commodity index-Optimum Yield Oil Excess Return.  It is intended to track the performance of crude oil

 I do not agree wit this carte blanche. The resources of a corporation need to be counterbalanced.An individual up against a company with billions has little or no chance of protecting him or herself from capricious management decisions (if you have ever been unfairly charged by some asshole  superior who simply did not like you, you know what I mean).
 That being said, unions can and are as corrupt as any other organization.The Teamsters are example numero uno in that regard, the UAW not terribly far behind.