From “Vassalotti’s View”, by Gary Vassalotti
If you’ve been following the auto industry, you can’t help but notice it’s going through a major transformation. And part of the transformation is a change of ownership. But, it’s not the normal change of ownership that companies go through when being put through the financial wringer. When Chrysler and GM come out of the wash, they won’t be owned by their respective creditors — secured or unsecured — or even the current shareholders (which, in a perfect world, would be the case).
Instead, they’ll be owned in large part by the UAW, an organization that most industry observers believe deserve a large part of the blame for the demise of the industry giants. Why, then, is the UAW getting any ownership position at all? How can it be that bond holders and other deserving parties — who should own the assets — are left-out in the cold?
But, let’s put those “minor”, “inconsequential” questions aside, and examine this (apparent) new industry structure more closely:
We’ll now have two of the three (US-owned?) automakers actually owned in large part by the same organization that’s responsible for negotiating labor costs? TWO out of THREE? Am I the only one that sees a major conflict of interest here? Or, to put it another way, are you invested in Ford? [entire post]