AFSCME 3357-HOF'S BLOG

Walletboy Returns DRAFT


I just got back from a whirlwind two-week East Coast tour, playing including playing Walletboy on Broadway. The auto industry didn't sleep while I was away. I'll get to as much as I can before I fall asleep. I may have to add links later.


Delphi & UAW Agree to Cut Legal Services

The Delphi deal closed. The UAW agreed to give Delphi a two-tier wage structure, and the new contract eliminates legal services benefits. There are significant healthcare copays, and the pension plan is changed to a 401k. The Delphi contract imposes a new wage scale from $14.00 per hour for new hires to $18.50 for old hands. GM agreed to subsidize the wages of holdovers for up to 3 years. Still, within three years, through plant closings and attrition, the UAW presence at Delphi is expected to be cut by about 7/8, from 17,000 UAW workers now to 2306 in 2012.

In fact, Delphi intends to only keep open four UAW plants: Kokomo, Indiana; Lockport, New York, Rochester, New York, and Grand Rapids, Michigan. I'm still trying to get confirmation whether elimination of the legal services benefit is part of the new contrac,t but even if the legal services benefit is retained, the closing of Delphi plants will likely mean the closure of several UAW-LSP offices, and a shuffle in others as seniority rights result in bumping.

Allison, GM's Aim was True
GM sells Allison Division to Private Equity firms.

On June 28, General Motors announced that it was selling its Allison Division to a private equity consortium lead by Carlyle Group and Onex Corp. The Allison division had its roots in racing Indy Cars. By the end of the 1920s, Allison was big with the military in making things that go. In recent years, medium and heavy duty truck transmissions as well as tank transmissions have been Allison's main forte. The Allison operations in Indianapolis that employ 3,400 will go to the buyers. GM will keep the part of Allison that makes hybrid truck transmissions in Baltimore, Maryland. GM will receive $5.4 billion in the deal, but it will lose another of its profitable enterprises. (Source (among others) Businessweek


Cerburus & Chrysler Deal appears to be Final

All of the international government approvals of DCX's agreement to sell Chrysler Division to Cerberus Financial appear to have gone through. A third quarter closing will make the deal official. Until then, all Chrysler product plans and personnel plans appear to be in limbo.

Bankrupt Supplier Dana Corp is setting up a deal to transfer retiree healthcare obligations to the UAW.



GM June Sales plung 21% - New products aren't helping much.

General Motors announced that its sales dropped 21% in June 2007 compared to June 2006. GM may try to sugar coat these figures, saying that sales in 2006 were inflated by loss-leading sales incentives. Robert Farago, author of the GM Deathwatch at thetruthaboutcars.com isn't buying it, pointing out that sales plunged also compared to May 2007, and comparative sales of its import-brand rivals posted double-digit increases. GM's market share is now down to 21%. Toyota's is up to 16.9%.

GM has touted several new models as its saviours. Unfortunately, these models are looking to have very short legs in the sales race. The most important models, the half-ton pick-up trucks, haven't improved GM's truck sales overall, in fact, they trail last year's pace by more than 20%. Saturn benefited the most by new products, with the Aura and the Outlook. Believe it or not, the Outlook actually received a glowing report by noted-GM hater, Consumer Reports.

What's coming up in the GM pipeline for 2008? Answer: not much. Or, should I say not much in the way of volume sellers. There's the new Saturn Vue that is already starting to hit the dealers. It's a direct competitor in the already overcrowded two-row sport CUV market. The new Cadillac CTS looks to be promising, but the segment is small, and there are lots of excellent competitors. In the family sedan market, Chevrolet gets a new Malibu. the problem is that the 2008 Malibu is a platform-mate of the Aura and Pontiac G6. The Aura and G6 aren't bad vehicles, but they haven't had enough of the right stuff to keep GM from augering in.

What do the competitors have? First and foremost, Honda will have a brand new Accord. Toyota has a new Highlander that has GM's new crossovers in its crosshairs. Hyundai is refreshing its two-year-old Sonata. Also, word-of-mouth has been building about Hyundai's crossovers. Mazda will be showing a new Mazda6, though it's not clear to me whether it will make a fall introduction. Ford's Taurus (formerly Five Hundred) should finally have the guts to take sales away from GM's larger sedans.