Oct 22, 2007
After workers voted to ratify the GM contract, JP Morgan analyst Himanshu Patel upped his estimate on GM’s annual savings – upped by 1 billion dollars a year! Now he says the workers’ sacrifices will enrich GM by five billion dollars annually!
GM boasted that the money taken from workers will go to other GM pet projects – like expanding its overseas business!
Before the contract came out, GM bluffed and threatened the workers that work would move overseas if they didn’t give huge concessions. So what happened? Workers gave the concessions and GM immediately announced it would take the money and run overseas.
“The risk associated with spending one billion dollars in the United States compared with spending one billion abroad is very different,” said analyst Rebecca Lindland. “So much uncertainty goes into a global emerging market, you never can be too careful.”
Except, if you are GM, spending workers’ money you just stole from them, why not?