UAW strike, failed Delphi talks among top threats to GM in 2007

UAW strike, failed Delphi talks among top threats to GM in 2007 http://www.detnews.com/apps/pbcs.dll/article?AID=/20070315/UPDATE/703150440
A strike by the United Auto Workers or a breakdown in talks with bankrupt
parts supplier Delphi Corp. are among the biggest threats this year to General Motors Corp.'s turnaround, the automaker said Thursday in a government regulatory filing.
GM will move aggressively in UAW contract talks later this year to continue reducing labor costs, the automaker says in the filing.
"Any UAW strikes, threats of strikes, or other resistance in connection with the negotiation of a new agreement could materially adversely affect our business," according to the filing with the Securities and Exchange Commission.
Another key issue is the ongoing talks with Delphi, spun off from GM in 1999, which were supposed to wrap up last year but continue to drag on.
Delphi is trying to finalize a deal with a group of investors who have agreed to pump up to $3.4 billion in the parts supplier. The investors, led by Cerberus Capital Management LP and Appaloosa Management LP, would control a newly recapitalized Delphi once it emerges from bankruptcy.
The bid, however, is contingent on Delphi reaching a complex deal with its unions to lower labor costs and an agreement with GM on its obligations to Delphi. GM has said it expects its costs connected to resolving its issues with Delphi to be between $6 billion and $7.5 billion.
Without an agreement, GM could run into trouble getting Delphi and its affiliates to adequately fill parts orders, further straining GM's already shaky North American operations, according to the filing.
The automaker listed a host of other risk factors for 2007, including the rising costs of raw materials used in automobile production, volatility in its supplier base and increasing fuel costs.
GM also said it will run into problems if its strategy to pare back incentive spending results in reduced demand for its vehicles.
The company sold 9.1 million vehicles worldwide in 2006 for record revenue of $207 billion, up from $195 billion in 2005.
The filing came a day after GM released its fourth-quarter and full-year earnings for 2006.
In the fourth quarter last year, GM earned $950 million on sales of $51.2 billion, its biggest quarterly profit in more than two years. GM's important North American operations narrowed its quarterly loss to $14 million from $1.4 billion a year earlier, but the unit finished the year with $779 million in red ink.
For all of 2006, GM lost $2 billion, an improvement of more than $8 billion compared to a restated $10.4 billion loss in 2005.
-- The credit belongs to the man who is actually in the arena; whose face is marred by dust and sweat and blood; who strives valiantly; who errs and comes short again and again; who knows the great enthusiasms, the great devotions and spends himself in a worthy cause. Who at the best, knows the triumph of high achievement; and who, at the worst, if he fails, at least fails while daring greatly. T.R. April 10, 1899
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Motorsforum.com is a website by car enthusiasts for car enthusiasts. It is not affiliated with any of the car or spare part manufacturers or car dealers discussed here. All logos and trade names are the property of their respective owners.