Personal Dividends

Today, February 17 2009 is the day when GM and Chrysler go back to the congress to demonstrate that they have a viable business plan to operate profitably in the future. Unfortunately, as of this writing, it appears that GM is still locked in discussions with UAW on the Retiree Health Care issue and no agreement has yet been reached. If you recall, GM and UAW had agreed in 2007 to establish a union run Trust Fund to pay for retiree healthcare costs and GM would pay into this fund. It appears that GM wants to pay into the trust partially in stock while UAW understandably wants the trust fund to be funded with cash.

In my opinion, GM and UAW are going about this incorrectly. The need of the hour is not to penny pinch on retiree health trust fund. The need of the hour is to completely rethink whether GM can even afford to maintain a health fund for retirees when there is a realistic chance that the company may not even survive. This is not the time to think about small incremental wins. This is a do or die situation and radical thinking is called for. I seriously think that the American taxpayer will not get the privilege of witnessing a solid viable business plan from these companies. These automakers need the benefit of bankruptcy protection to truly restructure their companies become profitable and save as many jobs in the process as necessary. I hope I am pleasantly surprised when they do present their plans to the congress but I am not holding out much hope