Best Business Commentary

Who wins in the GM strike?

The United Auto Workers union is shooting itself in the foot with this strike, says Doron Levin in Bloomberg. GM pays up to $30 more an hour in labor costs than Toyota, and much of that gap is “due to the cost of retiree health care.” GM is offering to fund a union-managed health care trust, but the UAW acts as though this “creative solution” is something it “is being asked to concede rather than a golden opportunity.” Well, the current “$50 billion health-care entitlement” is bound to “go up in smoke” if GM files for bankruptcy. One thing’s for sure: “Under no circumstances can GM afford to keep building vehicles in the U.S. if it can’t find common ground with its workers.”

“GM can afford to play hardball for a while,” says Joann Muller in Forbes.com. But the union, with almost $1 million in its strike fund, “can hold out much longer if it has to.” The UAW has maybe a year, but GM will start to feel the pain after a month. And UAW president Ronald Gettelfinger needs a “big win” to bring back to his members, like production promises for three plants that have nothing in the pipeline. Neither side wants the strike to go on very long. “If there’s any bright side to be had, Ford Motor and Chrysler are the ones having it.”

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