Not a good deal from a salaried worker's view, was my point. Good for GM long-term, in a strictly accounting sense, well, you could make that argument, but even as you describe it, the effect on GM's fiscal health from this change would be negligible, a lot like polishing the brightwork on the Titanic as it slides beneath the waves. When you look at their real problem, the massive liability of UAW pensions and benefits for the wage workers, all this really does is completely sever any remaining financial incentive for a salaried employee to stay with GM over that long term, which itself will affect GM's long-term health.
Contrary to what raiders and fund junkies think, there is a lot more to fostering a productive enterprise climate with a healthy future outlook than buying and selling talent like it was a supply. You certainly need to have a flux of people with new insights and ways coming through, and the ability to move deadwood out, but you also need longevity and institutional memory, which requires some reason for people to stick around. Ironically, the one area where the model of labor-as-a-supply really does work is the assembly line, and that's exactly where GM can't use it because the UAW owns their asses. It is also unfortunately a model that Congress and Democrat Presidents periodically try to apply to DOD, generally with disastrous results.
GM has been moving in this direction for twenty years, through early retirements, and salaried cutbacks. Any sense of corporate/employee loyalty disappeared long ago. The lack of institutional memory is what led to their ultimate downfall, particularly after the EDS, and then Hughes acquisitions. They forced out all the salaried employees that actually knew something about building and marketing vehicles, and as those operating units became more and more unprofitable, they focused their efforts on trying to be a bank (GMAC), and an insurance company (MIC), which were profitable.
The remaining people were rather heavily represented by young MBA's that were only focused on the days share price, and next quarters earnings report.....not designing and building cars and trucks. As their market penetration plummeted they attempted to take up the slack with overseas operations, until that fell apart with several recessions in both Europe and the Pacific. Joint ventures with both Toyota and Isuzu went from being an asset to an anchor around their necks, then the interest rates began to fall, which doomed the banking side of their revenue stream, which they stupidly tried to use to prop up lagging vehicle sales through incentives, etc., until that coffer ran dry.....
To summarize, they failed the primary test of a successful large-cap business.....stick to your knitting.....and envisioned themselves as a worldwide diversified conglomerate that just happened to build automobiles.....until they ran out of rope.....
Caving to the UAW, instead of locking them out, and setting a new cost/benefit standard just hastened that demise.
doc
