Recently a Deutsche Bank analyst revised his price target for GM’s stock from $4 down to $0. The first-order ramifications of such a reality are almost too enormous to comprehend, much less the second- and third-order effects. The nation’s unemployment rate would almost double, the US auto industry would be essentially cease to exist and a prolific game of finger-pointing would ensue–all in the space of about 24 hours. So imagine my surprise when, on that very day, my Negotiation professor shared with the class a documentary on the GM-UAW labor negotiations of the early 80′s. Timing is everything.
It certainly was facinating to witness the inner workings of the Canadian UAW as the negotiations with GM unfolded. Apart from the early 80′s clothing, the dynamics were largely as you would expect them. The corporation cited competition and rising costs, while the union made demands for more money because…they had been getting more money for the past 30 years and why should this one be any different? The rest, as they say, is history. The Canadian UAW got their concessions and the myth of ever-rising wages in the face of mounting competition has perpetuated through the decades. Sadly, I think it is the trauma of an analyst predicting bankruptcy that will bring people back to reality. Then again, GM’s ills were being foretold even during the labor negotiation reruns I watched this morning. How much advance notice does one need?
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