My Profit Is Down, So I Am Requesting That Carriers Supplement My Expenses

dhalltoyo · May 13, 2008

GM to Pay Up to Help End Axle Strike

By Light & Medium Truck

General Motors Corp., the biggest U.S. automaker, agreed to provide as much as $200 million to help American Axle & Manufacturing Holdings Inc. end a two-month strike that has idled all or part of 33 GM plants, Bloomberg News reported.

The money will be used for costs such early retirements and buyouts of union workers at the supplier, GM said Thursday in a U.S. regulatory filing. Renee Rashid-Merem, a spokeswoman for the automaker, said that “the offer will help bridge the gap between the negotiating parties.”

The United Auto Workers walkout at American Axle, GM's largest axle supplier, cut the automaker's production by 230,000 vehicles through the April and cost $800 million in the first quarter, Detroit-based GM has said. The strike began Feb. 26, Bloomberg said.

The cost comes as the automaker is also facing potential expenses to help avert a bankruptcy at a mortgage unit and support the exit from bankruptcy of Delphi Corp., its former parts division.

“We are hopeful that this offer from General Motors will help to end this strike as quickly as possible,” said Renee Rogers, a spokeswoman at Detroit-based American Axle, Bloomberg said.

The walkout reduced GM's cash flow by $2.1 billion in the first quarter because automakers get revenue when a vehicle is built, not when it's sold, Bloomberg said.

NOTE: After reading the above article I decided that if it is good enough for American Axle to receive "economic welfare", it should be good enough for me too.

terryandrene · May 13, 2008

The GM plant at Wentzville, MO has been calling people back to work, citing a recent supply of axles from an alternate supplier. This plant assembles the GM cargo vans.

greg334 · May 13, 2008

Gettlefinger is not happy with GMs offer, saying that it messes things up. Maybe the UAW can subsidize us, they seem to be the one with the money.

GM announced that they will close the Windsor Ont transmission plant by 2010 and I have a feeling the AA plant here will be closed soon too.

Kyreax · May 13, 2008

Yep, keeeeep striking, keep pretending that you're worth $37 per hour to turn a lugnut, and the auto manufacturers will keep shipping those jobs out of the country until the Autoworkers Union is finished.

Geezus, I've never heard of a more lucrative job for something so unskilled. It's not hard to build a car. It shouldn't cost that much to put it together.

RLENT · May 14, 2008

dhalltoyo said:
The walkout reduced GM's cash flow by $2.1 billion in the first quarter because automakers get revenue when a vehicle is built, not when it's sold, Bloomberg said.

I know I'm kinda slow and all .... but can someone explain to me exactly how the above works .... ?

Jack_Berry · May 14, 2008

i ran into a fella who had bought all those gov'ment grant books. seems he came across someone who was getting grant money for his fuel. don't know how much it was but anything is good and maybe, with last years receipts and planning, you can project for the new truck and start requesting aid.

greg334 · May 14, 2008

RLENT said:
I know I'm kinda slow and all .... but can someone explain to me exactly how the above works .... ?

It is hard to explain, the simple version is that the dealers are 'sold' the vehicles without actually ordering them as part of their franchise agreement and considered 'preordered' products that when they are built (not delivered) the dealer now owes the company for them.

The other part of this is the fact that the accounting methods used are more like projections and not actually cash accounting. This gives us those tremendous loses that the 'auto companies' post, like when GM lost $2.3 billion when in all actuality they made money.

A great illustration how this actually works is when Ford was dumping cars onto their franchisees when the Model T sales started to drop. From '25 (late '24) to production shut down, dealers were told you take them or else and a lot of them went under because Ford was increasing the quotas without telling the dealer. All of a sudden they would get three times amount of cars they actually could sell - all to have old man Ford show a profit and to show that the model T was not dead.