Posts Tagged: GM

Would you buy a used car industry overhaul from this guy?

Steven Rattner

Steven Rattner is hardly a disinterested party in gauging the effectiveness of the auto industry bailout that took place a year ago, but, writing in the Washington Post today, he may be right that the program worked.  The federal treasury and the American people stand to earn money on the GM bailout (we’re up $4 billion right now on our investment, according to Rattner) and even though the government owns so much of GM, it’s not being run by government officials, but by hard-driving corporate types who have begun bringing the word “profit” back into play, and cut GM’s expenses in North America by $8 billion this year.


Most coverage of General Motors’ future has focused on the Obama administration’s 60 percent ownership of a post-bankruptcy GM. But the United Autoworkers, which represents almost all GM workers, will own 18 percent of the company through their retiree health fund. And UAW gets 55 percent of Chrysler. With the Obama administration pledging a light hand in GM management, does that mean UAW will make management decisions? No, reports the New York Times’ Steven Greenhouse:

…[T]he Obama administration structured the G.M. and Chrysler plans to lessen the union’s voice in management. The retirees’ health fund has six public-appointed trustees and five union-appointed trustees. Though the union health trust owns 55 percent of Chrysler, it will hold just one seat on the Chrysler board. And at both automakers, the health fund’s shares will be nonvoting.

The UAW has often not been the most farsighted union. And other employee-owned ventures, like United Airlines, have ended in bankruptcy. It’s strange, though, that a bailout whose purpose is to lessen layoffs would not empower workers. It’s up to the workers still at GM and Chrysler to show they can make cars that people will buy and won’t ruin the environment. The UAW members have the most incentive — more than the new Obama-approved management team — to show that GM and Chrysler are still relevant.-MB