Sunday

Well That Was Quick

Just 2 days after going on strike against General Motors, it was over with. Well, that was quick. But then again, neither side wanted it to last very long any way.

80 GM plants were idle for only two days before a new deal was hammered out and it was over with. Under the new contract, a health care trust fund for retirees gets set up and some job guarantees go in place for current union workers. Some temporary workers, at a lower wage scale, will get permanent jobs with union blessing but on a two tiered pay scale approach. That means they'll get a lower pay scale than normal.

For GM, it's good news. $50 billion in long term liability gets taken off the corporate books by the trust fund setup. You can tell Wall Street like the news because GM's stock jumped up in value just under 10% higher on the day the settlement was announced.

Now, with stock value going up, manufacturing costs headed down, and the potential for profit there, maybe GM will get back to building quality again. Without it, none of this will make much difference as the imports continue to chew away at GM's US market share.