Car Makers Face Urgent Problems, Even With Government Bailout (blue collars to get hit again?)

[Omaha Steve]

http://online.wsj.com/article/SB122988629786724607.html?mod=googlenews_wsj

* DECEMBER 21, 2008, 2:50 P.M. ET

By ALEX P. KELLOGG

Although billions of dollars in loans are on the way from the federal government, General Motors Corp. and Chrysler LLC remain beset by big problems that need timely fixes, industry analysts said.

Burdensome union costs, long term financial strain and a short timeline for getting various stakeholders to the table will be not be easy hurdles to overcome even with the bailout package the Bush administration unveiled on Friday.

Brett Hoselton, a senior automotive analyst at KeyBanc Capital Markets, said in a telephone interview that GM and Chrysler are likely headed for some tough talks with the United Auto Workers union, and must come away with significant cost cuts quickly in order to qualify a second round of loans in the first quarter.

"Concessions need to happen – and happen soon," he said. "Because you're basically back to square one come February or March."

GM and Chrysler are likely to seek the complete elimination of the so-called job bank, a controversial program in which laid-off workers continued to get paid even when their plants close and they no longer report for work. UAW President Ron Gettelfinger has said the union will "suspend" the jobs bank.

Members of Congress and Bush officials have also pushed for the UAW to accept wage and benefit cuts to reduce costs down to the levels that non-union workers get in foreign-owned auto plants – a concession less palatable to the union.

FULL story at link.

[madrchsod]

1. another "analist" blaming the workers .....

lowering wages is never the answer...even the racist scumbag henry ford knew he had to pay workers enough to buy the cars they made.

14 an hour is a minimum living wage in most of the country....