Wednesday, December 3, 2008

Surprise! GM Wants Even More Money!

The Detroit Three (formerly the Big Three) groveled in front of Congress last month, asking for $25 billion to keep the doors open. Congress rebuffed them and sent them home with instructions to return with "a plan." What do they come up with? A request that now clocks in at $34 billion. It has grown by a whopping 37% in just a matter of a couple of weeks! GM says that they need at least $4 billion immediately, before the end of 2008. It looks like they are burning through cash at a rate of around $4 billion a month now, obviously accelerating since their last quarterly report. Just last month alone, GM's auto sales were down 41%.

I'd like to relate a story that was told to GR Pundit today by someone who is a project manager for a large computer manufacturing company.

This person, we'll call him Ken, was doing a project at one of the big three automakers recently. We'll call this automaker DA (for Detroit Automaker). Ken explained how he was attempting to help DA with its PC deployment process. Here's how it worked: The computers would arrive. FedEx is not a unionized company, so the FedEx employees were not allowed to unload the computers. One unionized employee would move the PCs from the dock to the staging area. Another union employee would move them from the staging area to the storage area. Another union employee would move the computer from the storage area to the actual workstation of the person to use the PC. Each step would require a change order and a $50 charge from the union, plus the labor cost of each union employee. No one from Ken's company was allowed to move the computers themselves, only the unionized employees could do so. Ken said the entire project was such a nightmare that they basically gave up trying to improve DA's processes. Impossible due to UAW work rules.

This is why the UAW is desperate to prevent bankruptcy. It would ruin their "work rules" scam.

Perhaps this is one reason why 61% of Americans oppose the Detroit Three bailout.