No Pay Cut, Says Auto Union!

Here's the bad news....negotiations to approve U.S. automakers $14billion bailout plan had stalled, due to rejection from U.S. Senate. Strange decision for me, considering the amount was only a "fraction" of what the U.S. banking industry had sought earlier ($700billion)! Further digging revealed that the only reason the plan was rejected was due to the fact that the U.S. Auto Workers Union rejected the Republican demands to accepting a pay cut, in order to realign the wages with Japanese automakers, namely Toyota, Honda and Nissan.

Doesn't sound like an unreasonable demand, does it? Let's face it, in order for someone to gain (from continued employment), it's fair to expect that someone ought to give up something in return. So given the unrealistic nature of the union workers, the decision probably serve them right!

It is reported that both General Motors and Chrysler are experiencing severe cash flow problems and they may not even survive beyond the month of December without filing for bankruptcy.

I would imagine is probably wiser now to bite the bullet, and then demand for better package when business improves later down the road!

Nevertheless, the White House later said it was willing to consider using money initially set aside to shore up the banking sector to give these beleaguered auto makers urgent aid. However, whether such plan will materialize or not remains to be seen.

One other thing, the investment community may not have the patience to wait for the saga to unfold. It may just lead to another global market white wash!

Let's hope not!