State of the Union September 9, 2011

Sept. 9, 2011 online at www.uawlocal2250.com


More Open House Info: Radio station WIL (92.3) will be doing a live broadcast from the plant the day of the open house, featuring the Danny Montana show, from 10 am – 2 pm. There will also be a brief interview to promote the event on KSDK Channel 5 on the plaza with plant leadership at 12:30 pm on Monday, Sept. 12. The Post Dispatch is planning to do an article about the Wentzville Assembly Center as well. Other media requests are under consideration and we’ll let you know what, if any, other participation there will be. Regarding the food being prepared by Pete’s Drive In, here is the menu: grilled brats or burgers will be $3; colossal potato chips are $4 for a small order, $6 for a large and $8 for a bag. There will be a GM employee special of $2.50 for a burger or brat and $6 with a small bag of chips and will be available at lunch time.

The following vehicles will be available for the Ride and Drive as well as in a static display for you to check out:
o Chevrolet - Silverado HD 2500, Traverse, Equinox, Malibu, Cruze ECO, Camaro convertible, Volt
o Cadillac – CTS Coupe, CTS-V Coupe, CTS Sedan, Escalade ESV
o GMC – Sierra EXT cab, Acadia Denali, Terrain
o Buick – LaCrosse, Enclave
•    From Reuters: General Motors Co. recognizes that its pension deficit represents a risk to the company that management is hoping to take "off the table" for investors, Vice Chairman Steve Girsky said on Wednesday. The automaker's pension plan in the United States was underfunded by $10.8 billion at the end of June, according to a slide presentation prepared by GM for an investor conference in New York. This does not include some $2 billion in stock the automaker put into the plan in January. Analysts have said the automaker's pension shortfall is among the biggest risks to investors. The recent drop in interest rates compounds these issues because it increases the size of the underfunding. "We want to take the pension risk off the table," Girsky said during the Credit Suisse Automotive & Transportation Conference. Girsky told investors that GM did not know how much it will put into the fund next year. The automaker is not required to make any contributions to its pension fund until 2015. "We don't have to put a penny into this thing until 2015 and there is a long runway from here to there," Girsky said. "That said, we think it's a risk. The idea is to de-risk the company."

A look at field supplies for the competitors to our van reveals that Ford Econoline supplies (excluding passenger vans) have risen 20.7% over July and are up 65% over last August, according to Wards Auto data center. The days supply stands at 65. The passenger version is up 41% over last month and is at 51 days supply. Sprinter supplies were up 6.6% over July and stood at 50 days supply. The Nissan NV supplies were up less than 1% but the days supply was 195, easily the highest days in field number for the entire light truck industry.

From the Detroit Free Press: General Motors' "fortress balance sheet" philosophy has caught on, earning it first place in Morgan Stanley analysts' automotivestock rankings, far above sixth-place Ford. Post-bankruptcy GM is shunning debt and holding onto cash, saying it will decide what to do with some of its $33.8-billion hoard once the economic environment stabilizes. Any payment to its pension fund or as a shareholder dividend would come only if the automaker thinks it has sufficient funding for its future product plans and any possible economic disasters, Chief Financial Officer Dan Ammann has said. That's the philosophy behind the automotive stock rankings Morgan Stanley released Tuesday, which named GM, based in Detroit, and suppliers Johnson Controls, based in Milwaukee, and BorgWarner, based in Auburn Hills, as the analysts' top three "most likely to succeed," regardless of whether the U.S. enters a new recession this year. "A 'fortress GM' strategy enables the company to ride out years of downturn without sacrificing its long-term revival," analyst Adam Jonas wrote. "GM's castle isn't impenetrable, but its walls are high and thick." Fordhas only $8 billion of net cash, or cash minus debt. If the U.S. plunges into a second deep recession, Ford could have more debt than cash within 18 to 24 months, Jonas wrote. The stock rankings come as Morgan Stanley has cut its sales forecast for the coming years. This year, analysts Jonas and Ravi Shanker predicted, U.S. auto sales will number 12.6 million, down from their previous forecast of 13 million but higher than the 11.6 million light vehiclessold last year. Sales will increase to 14 million in 2012 and 15 million in 2013, they said. U.S. light-vehicle sales often hit 16 million before the recession. However, Morgan Stanley lowered its one-year stock price target for GM from $50 to $45, in light of slowing growth. Morgan Stanley also cut Ford's one-year stock price target from $21 to $18.

From Automotive News: Chrysler Group LLC and the United Auto Workers union are discussing a plan that would lift the base wages of entry-level workers at the No. 3. U.S. automaker over time, two people involved in the talks said. The development comes as Fiat-controlled Chrysler and the UAW make progress toward a new contract with less than a week before expiration of the current four-year deal on wages and benefits on Sept. 14. Chrysler CEO Sergio Marchionne could be involved in the contract talks as soon as the weekend, one of the sources said. That would follow a meeting earlier this week between UAW President Bob King and General Motors CEO Dan Akerson. Chrysler, which is controlled by Italian automaker Fiat SpA , has proposed "two to three" models for boosting those wages over time, one of the sources said. The other source said Chrysler has proposed to increase wages to between $16 and $18 an hour. The high end of the $16 to $18 scale would represent a wage increase of more than 20 percent, but stops short of the $19.50 an hour that Volkswagen AG's workers in Chattanooga, Tenn., can make after three years on the job. About 12 percent of Chrysler's 22,800 union-represented workers make the lower second-tier wage.