Friday, April 14, 2006

Last tango in Detroit?

Last tango in Detroit?General Motors, Delphi and the unions

From The Economist print edition

As fears grow that General Motors will go bust, management and unions are locked in a mournful embrace

“IN THIS case, it takes three to tango.” So said Rick Wagoner, the boss of General Motors (GM), this week—his re-working of an old cliché, capturing the contortions he is having to perform as he struggles to save the ailing giant of the car industry. Given its shrinking market share, GM would be hard enough to revive were it any firm in any industry. But GM is not any old firm, and designing more sellable cars is arguably the least of its problems. These, as Mr Wagoner says, require it somehow to find a way not only to get back on its feet, but also to dance simultaneously with Delphi, its now bankrupt parts supplier, and with one of America's toughest trade unions, the United Auto Workers (UAW). No wonder the firm's share price heads ever lower, and observers talk gloomily about GM stumbling dangerously towards Chapter 11 bankruptcy protection.

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