I agree that senior management at GM is a mediocre lot, but that is all the more reason for the rank-and-file workers to display leadership in this situation. The rank-and-file has the most to lose, and if they are unwilling to agree to changes, they will see their jobs vanish.
GM is going to manufacture cars, but whether the firm does so in the US or not is another matter.
The best course of action for the UAW is to do all in its power to ensure that the company produces quality cars the public wants to buy and at reasonable prices. But if the UAW continues to believe that it can cling to an outmoded labor system, then there will be few if any cars assembled by UAW members.
Standard & Poor's on Monday cut its ratings on General Motors deeper into junk status and said it may cut them again, citing the bankruptcy filing of GM's largest supplier, Delphi Corp.
The downgrade could further hamper GM's access to funding, which was already hurt when S&P first downgraded the world's largest automaker to junk status in May.
Delphi's bankruptcy could impede GM's efforts to turn around its ailing North American vehicle operations, S&P said in a statement.
GM will likely face demands from Delphi for price relief and is also exposed to the risk of supply disruptions caused by labor strife at Delphi as the parts supplier downsizes its work force, S&P said.
GM's troubles have worsened in recent weeks after two major hurricanes drove U.S. gasoline prices over $3 a gallon, curbing demand for the automaker's profitable SUVs. GM posted a 24-percent drop in vehicle sales in September with sales of SUVs and trucks off 30 percent.
GM's bonds with an 8.375 percent coupon due in 2033 fell to 76 cents on the dollar from 77.5 cents on Friday, according to MarketAxess.
Ratings of GM's finance arm, General Motors Acceptance Corp., and its mortgage unit Residential Capital Corp. were not changed but are on review with "developing" implications, meaning they may be upgraded or lowered.
The potential for an upgrade reflects the chance that GM may separate these units from their parent by changing their ownership, S&P said.
"Such an outcome now seems more likely to occur, given the increased challenges that GM is facing," S&P said.
S&P cut GM's long-term rating by one notch to "BB-minus" from "BB." The rating remains on review for another downgrade. GM and its financial unit had $284 billion of consolidated debt at the end of June.