It also reinforces the fact that GM will have to make even more significant cuts in their own cost structure going forward.
The UAW has a lot of incentive to negotiate concessions out of court, given the lesser influence it would have in a bankruptcy scenario.
Recent incentive programs have established lower market pricing that makes GM increasingly vulnerable to volume declines which could occur as a result of a decline in economic conditions or simply a sustained falloff following recent industry sales spikes.
We have not yet seen any supply disruptions, but it remains a key risk, ... That risk will only increase as we get closer to a date where Delphi, if unable to achieve a contract with a UAW, needs to impose a contract.
It's a distinct possibility that a work action does take place somewhere through the course of this bankruptcy.
The extent of the wage and benefit reductions Delphi is seeking would be difficult for any union to swallow easily.
GM's opportunity for shrinking its cost structure appears to be narrowing.
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