The United Auto Workers said that they will help 3 important automakers: General Motors, Ford and Chrysler.
They agreed to work together with the embattled U.S. automakers about changing their labor contract so they win 34 billion dollars with this action.
This news was made Wednesday by the president of the United Auto Workers after he had a conference with the presidents of Ford, Chrysler and General Motors.
General Motors was the first one to say that they are in bad papers, they said that they need some financial help otherwise the bankruptcy wasn’t far away. They needed 4 billion dollars by the end of the year. Also Chrysler warned their investors and asked for help, they said that they would run out of cash in the first quarter of next year so they really needed some help because bankruptcy wasn’t far away.
The companies were asked to go to the Congress on Tuesday to talk about their problems and to say how they will use the federal loans and to return them profitable.
The Union came with a “jobs bank” this means that the jobs are saved in General Motors and that they will pay them. This action isn’t only for General Moters. Ford and Chrysler would get the same if they need this. But the president of UAW is not convinced, according to him their need to be more actions to save the automotive sector in these crisis.
He also said that there need to be investments in the retiree health but because of this crisis and the help of the Union this would be difficult.
According to me this is a positive news item. The automotive sector is in problems and they will be the first victims of the global recession and financial crisis. The Union needs to invest money but it’s impossible to give money all the time. We need to learn about this crisis, we need to learn that we have to control much better about the companies and that the governments and other institutions will not always be paying when they are in difficulties.
These are hard times but we have to look forward and when they save these 3 big companies a lot of jobs are saved and the economy can recover again. But we have to learn, stronger regulations are necessary.
Source: http://money.cnn.com/2008/12/03/news/companies/uaw/index.htm?cnn=yes
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I believe that the creation of a job bank is very good to help the employees of the automakers. But will this be enough to keep General Motors, Ford and Chrysler from going bankrupt? I don't know. I think it will be very difficult to get out of this situation, because the end of this recession is not comming soon and people don't buy as many cars as they would when there is no recession.
I agree with Wouter and Jens. I think it is good that the UAW helps these 3 companies. It is important to save the jobs, the unemployment is already low enough. That is why I believe the 'jobs bank' is a very good idea.
But I can't say if these solutions are good enough to really save the companies.
Wouter says that the union can't always provide money if a company is in difficulties. I feel the same way.
I also think that there has to be stronger control and regulations that are more strictly.
It's also true that we have to learn of this crisis, just because it might be the worst of the century.
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