They Signed

The UAW and GM have apparently come to agreement on a new contract, ending a day-and-a-half strike. Terms weren't disclosed, but are believed to contain some job security concessions in exchange for the formation of a VEBA.

I am not sure what will become of the VEBA, but it is hard to see that being a good deal for retirees. The only way that this saves GM any money is if it's underfunded -- so, by definition, if it's a savings for GM it's going to run out of money as happened at Caterpillar.

Then again, the VEBA could be funded more or less fully (70% is the figure that's been batted around, which is close to full funding as some of the obligations of the fund haven't actually been incurred yet), which makes it simply a means of removing uncertainty from GM's books, and making Wall Street happy with little effect on the actual size of the obligation.

Watch this space -- as the details come out it'll be interesting to see what happened, and if the contract is ratified.

No Guarantees

Sorry I was gone, I was busy celebrating the 2007 AMERICAN LEAGUE CENTRAL DIVISION CHAMPIONS!!!!!! See you at the Jake for the ALDS!!!!!!!

(Sorry about that, I let my emotions get away with me for a second.)

You may have noticed that the UAW went out yesterday. It seems that one of the more important issues is job security. I'm not sure they're thinking this through all the way. You can't get a guarantee of job security besides producing a product at a price people will pay for it. If you do that, you don't need a guarantee. If you don't, no guarantee will save you.