CNBC is reporting this morning that General Motors (GM) and the UAW are in a standoff regarding the renegotiations of labor contracts. The implication of this is that the UAW is unwilling to give GM the same concessions that they were given to Ford (F) last Wednesday.
“Looking at GM here, a bunch of headlines crossing. The Journal saying the UAW deal with Ford that everyone said would be the deal that GM copied and Chrysler copied isn’t going to work for GM…Not good news. They’re looking to cookie cutter the thing to not keep going into endless negotiations. Not a particularly good headline for General Motors.”
Everyone had speculated that once a deal was reached with one of the big three, the others would just get the same deal. Details about where the talks broke down are sparse at this point, but the delay could either mean that the UAW is unsatisfied with the amount of concessions offered to Ford or that GM needs a greater amount of help from the unions. Either way, the longer this drags out could potentially be detrimental to GM that is losing cash at a very quick pace.
The Wall Street Journal is also reporting that GM CEO Rick Wagoner said today that bankruptcy filing could work, but is risky and would cost more money presumably from the government. Even as the talks have slowed down for the time being with the unions, Wagoner is confident that “99% of GM’s problems” could be resolved outside of filing.