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This is Why the UAW Should Not Own 55% of Chrysler

We know that part of the terms of the Chrysler "bankruptcy" is that the UAW health trust will get 55% of Chrysler's shares. Already the UAW is proving to not be a very good owner. Gettelfinger went on NPR and announced to the world that for the union to pay the benefits to its retirees it will have to start selling those shares as soon as it can.

The UAW's reward, though, could turn out to be punishment if the stock price doesn't rise.

"What's happening at Chrysler and GM is not employee ownership in any recognizable way," said Corey Rosen, founder and executive director of the nonprofit National Center for Employee Ownership. "The employees don't own any part of Chrysler or GM, it's the health trust, and they're going to sell that stock as soon as they can. It's more like somebody saying 'I can't pay the money I owe you, so take some stock and you can sell it.'"

That's exactly what the union intends to do, its president Ron Gettelfinger said Friday in an interview with National Public Radio.

"The VEBA's going to be stressed in order to pay the benefits. So what we will need to do ... is as soon as we possibly can, to start selling these shares," he said.

I'm sure those with half a brain already see how stupid Gettelfinger was for making this statement. When you own shares in a company, especially a lot of them, you don't announce to the world that you need to sell those shares fast. Why? Because it drives down the value of the shares. Let's say you put your house on the market. What happens to the value of that house if you tell everyone who comes to view it that you've got to sell it as soon as possible because you've got to pay your bills? You'll get offers that are a fraction of what you asked.

It's difficult enough for a company's stock to gain any value when it first comes out of bankruptcy, but thanks to Gettelfinger's stupid comments, he has helped make it even more difficult. That's not a smart way to make a profit, but we are talking about the president of the UAW.


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Comments (23)

Heh. I guess it's harder t... (Below threshold)

Heh. I guess it's harder to bite the hand that feeds you ... when it's your own hand.

Maybe its a psych and he pl... (Below threshold)
epador:

Maybe its a psych and he plans to buy MORE after the price drops even further, if that's psosible.

ml - "Heh. I guess it's... (Below threshold)
marc:

ml - "Heh. I guess it's harder to bite the hand that feeds you ... when it's your own hand."

But it's sooooo much easier to bite your own ass.

Either way, with the curren... (Below threshold)
Glenn Cassel AMH1(AW) USN Retired:

Either way, with the current Chrysler and GM doings, the next one will be an F-150.

The union is so used to scr... (Below threshold)
mpw280:

The union is so used to screwing its members why should they stop now?

Well then, I suggest the UA... (Below threshold)
DaveD:

Well then, I suggest the UAW health trust use its ownership powers to help reorganize Chrysler into a business that will add higher value to the shares they own.

Does anyone with half a bra... (Below threshold)
sam:

Does anyone with half a brain cell believe that Chrysler is ever going to make any money?

Don't these car companies n... (Below threshold)
kathie:

Don't these car companies need investors and bankers to back them? Please don't tell me the tax payers are the sole backers! Surely after today that will be the case.

I read a story once about a... (Below threshold)
RicardoVerde:

I read a story once about a pleasant attractive woman who was convinced by some software gurus to come to their new startup company and be their receptionist. They had problems making payroll during the early days and she agreed to take stock instead. She was being interviewed seven or eight years after the startup. She had become the largest shareholder in the company, worth something like $10 million. She still worked for the company... as a receptionist.

This is why the Hedge Funds... (Below threshold)
hcddbz:

This is why the Hedge Funds should with secured loans should have gotten the largest %. They have skin in the game. UAW has not a clue.

I fail to see why the autho... (Below threshold)
Bob:

I fail to see why the author is so intent on ridiculing Mr. Gettelfinger for being honest when his comments will have no effect on the problem or its solution. Chrysler cars are not selling now and the lagging sales will not be helped by (1) bankruptcy, (2) union ownership/management, (3) government ownership/management or (4) partnership with a company, Fiat, that has never been able to sell its cars in the U.S.

As a lifelong "Buy American... (Below threshold)
CZ:

As a lifelong "Buy American" guy I will never buy a product from any organization that takes my money without giving me anything in return.

Does anyone sell "Don't Buy American" bumper stickers?

Union swine. Socialist pricks.

Why would anyone buy a car ... (Below threshold)
GianniD:

Why would anyone buy a car from a company whose workforce is bloated, overpaid, lazy, and more interested in how it can steal from the company, than in providing exceptional value to its customer?

Have had foreign cars for almost 20 yrs now, and have NO plan to ever buy a Big 3 car vehicle ever again.

I like Jeeps. Have had the... (Below threshold)
Codekeyguy Author Profile Page:

I like Jeeps. Have had them since 1980 or so. Looks like I'll just keep the two I have now running.

Publicly owned companies ra... (Below threshold)
kathie:

Publicly owned companies raise capital through brokers to build new cars. They get loans from banks. Tell me who in their right mind would buy into a company owned by losers. So once the common shares have been sold to pay for heritage health care, they are broke. Then where does this company go?

"So once the common shares ... (Below threshold)
retired military:

"So once the common shares have been sold to pay for heritage health care, they are broke. Then where does this company go?
"

WEll you see this is where Obama pumps another $30 billion of taxpayer money into it. Then the company comes back 3 months later and says if they dont get another $25 billion they will have to go bankrupt again. Then after another 3 months Obama structures the bankruptcy again giving the UAW another 55% of the company and the cycle starts all over again.

Oh and dont say anyting about laws. I mean with them controlling congress they can write any laws they want.

Isnt it nice to be on the Democratic payroll.

Odds are, the UAW, a subsid... (Below threshold)
GarandFan:

Odds are, the UAW, a subsidiary of the DNC, will ask their friends in Congress to bail out the UAW health fund...via nationalization of health care. That will free up all that stock to be sold in order to finance future elections.

Funny how it all works out.

The workers who will go on ... (Below threshold)
kathie:

The workers who will go on Medicare are in for a big surprise. Medicare is hardly a tony policy.

55% ownership of a very sic... (Below threshold)
Paul Hooson:

55% ownership of a very sick company that may still fail and go out of business is hardly any prize at all. Fiat has been a chronic marketing failure in the U.S., and Chrysler once acquired the very sick and financially bleeding AMC brand. My best guess is Chrysler will probably be gone within 3-5 years, and the Jeep brand might be acquired by some brand like Tata Motors of India, which has already acquired the ailing Jaguar brand from Ford as well as the Land Rover company line as well.

The UAW is selling out its ... (Below threshold)
jpm100:

The UAW is selling out its shares and because of the way its handled it, it will likely need to sell them off even faster.

This is a bad thing? And its not like they have control to begin with.

"Does anyone with half a brain cell believe that Chrysler is ever going to make any money?"

For FIAT, probably a good chance. I'm sure President Chicago won't see any personal benefit for him or his friends via FIAT...

yeah...

I'm sure.

Paul Buffoon said"... (Below threshold)
retired military:

Paul Buffoon said

"55% ownership of a very sick company that may still fail and go out of business is hardly any prize at all. "

Gee since they put up $10 billion to get 55% and the common stockholders put up $27 billion to get 10% it sure looks like they are getting a better deal.

That plus the fact that Obama will ensure they are paid off no matter what they do and they dont have anything to worry about. He can always shove another $30 billion of our money into the company.

Chrysler's shares are worth... (Below threshold)
Mac Lorry:

Chrysler's shares are worth about $100 per share in confederate dollars. Of course, if Obama keeps spending at the rate of the last 100 days then $100 in US dollars will be worth about $50 in confederate dollars.

Hooson - em>"55% ownership ... (Below threshold)
marc:

Hooson - em>"55% ownership of a very sick company that may still fail and go out of business is hardly any prize at all."

My how things change, correct me if I'm wrong but I seem to remember you being "all in" for the first chunk of cash sent their way via Bush.

Now months later you've not only changed your story but the U.S. taxpayer is out 4 billion that was given then and that Evil Bunch of Hedge Fund" managers obama referred to - that actually comprise a very large number of private investors and retirement funds of average Americans - have been SCREWED out of ALL of their investments.

"Good job Browne," oops, I mean good job barack hussein obama!




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