See the two stories here and here as the fate of General Motors hangs in the balance. It all comes down to whether current GM employees are willing to allow serious cuts in pay and retirement benefits, cuts that will bring GM costs down level with, or below those at Toyota and Honda plants in the U.S.
It may be that GM's hourly workers cannot or will not bite this proverbial bullet. In that event, GM as the present firm will cease to exist and all current stockholders' equity will disappear as the firm reorganizes in Chapter 11 bankruptcy.
GM executives whose bonuses were paid in stock will be hurt as will the many tens of thousands of former shareholders and like numbers of employees who will be terminated without the supplemental unemployment benefits to which they've become accustomed.
Also likely to disappear will be product lines like Pontiac, Saturn and GMC, perhaps also Buick in the U.S. although Buick will likely continue in China where the brand has glamour. Tens of thousands of GM retirees will find their retirements have become hard-scrabble. Much GM parts and subassembly production will be shifted to plants elsewhere, maybe Guatamala or Bangladesh? Many supplier firms will disappear.
If all of this comes to pass, it will be because the UAW workers have collectively made the same decision as that made by a person who'd rather commit suicide than go to prison for life. It is a "I'd rather not work in the auto industry at all than work under the conditions you offer" decision. Oddly, I think that is an okay choice for workers to make. Maybe it's not economically rational, but it is their lives after all, and they get to decide what to make of them.
This reflects a classic piece of DrC wisdom: everybody does what they have to do, and then they live with the consequences of their behavior.
