Ron (don't blame us) Gettelfinger, of the UAW, has publicly stated today that the UAW will make no further concessions with regards to a Detroit bailout. In a noticeable change of rhetoric, Mr. Gettelfinger is not blaming Detroit management either. Instead, Mr. Gettelfinger's bogey men are Wall Street and high gasoline prices. Never mind that GM has not made money from U.S. automotive operations in years, instead relying on foreign sales and profits from GMAC. GM was forced to resort to 0% financing in 2002, before high fuel prices. Some may argue that the economy was sluggish in 2002. OK, What about 2003 to 2006? The economy was booming, borrowing costs were low and fuel prices, although somewhat high, were no higher than today's prices and much lower than their peak earlier this year. What about the fact that Detroit's domestic competitors are weathering the storm just fine.
No the bottom line is that the Detroit Three, for years, caved in to UAW demands for ever-higher wages and better benefit packages. To pay for these union contracts, the Detroit Three were forced to depend on high-margin vehicles such as trucks and SUVs. For years, experts were concerned that the Detroit Three were too dependent on one kind of product and did not have the needed flexibility to successfully meet changing consumer demands. They were right. Today's Detroit dilemma is complete the fault of Detroit management and the UAW. If they remain rigid they will die. If not now (government money), then down the road when irate customers join he millions of customers who have already left the Detroit Three forever. This Detroit vehicle owner is poised to do the same.
Here is a CNN / Money story from January 16th 2002:
http://money.cnn.com/2002/01/16/companies/gm/
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