"The agreement provides a framework that will allow them to get some
significant things done," he said. "It takes the issue of a strike out of the
picture and puts a higher level of certainty on what the costs will be for GM on
both the Delphi restructuring as well as their own
downsizing."
GM said last week a labor deal at Delphi would probably cost the company
between $5.5 billion and $12 billion. The No. 1 automaker also said expects to
increase the charge for its contingent exposure to $3.6 billion in 2005 from the
previous estimate of $2.3 billion.
We can see the potential loss of disruption may cause GM more than billion. But the question is after doing so, can GM gain much lower price from Delphi in the future? We cannot overestimate the loss of disruption, although I hope it will be huge coz I am do research on that
1 comment:
The answer to your question is NO. GM acted because it had to. With continual errosion of its US market share, its credit rating, and its available reserves, a Delphi strike would have been devasting to GM, Delphi and their employees. No one doubts this. GM's dependence on Delphi and its contractual and ethical obligations have put the number 1 automaker under the gun. The question is how can GM restructure itself so that it is both less vulnerable and profitable?
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