We know that part of the terms of the Chrysler “bankruptcy” is that the UAW health trust will get 55% of Chrysler’s shares. Already the UAW is proving to not be a very good owner. Gettelfinger went on NPR and announced to the world that for the union to pay the benefits to its retirees it will have to start selling those shares as soon as it can.
The UAW’s reward, though, could turn out to be punishment if the stock price doesn’t rise.
“What’s happening at Chrysler and GM is not employee ownership in any recognizable way,” said Corey Rosen, founder and executive director of the nonprofit National Center for Employee Ownership. “The employees don’t own any part of Chrysler or GM, it’s the health trust, and they’re going to sell that stock as soon as they can. It’s more like somebody saying ‘I can’t pay the money I owe you, so take some stock and you can sell it.'”
That’s exactly what the union intends to do, its president Ron Gettelfinger said Friday in an interview with National Public Radio.
“The VEBA’s going to be stressed in order to pay the benefits. So what we will need to do … is as soon as we possibly can, to start selling these shares,” he said.
I’m sure those with half a brain already see how stupid Gettelfinger was for making this statement. When you own shares in a company, especially a lot of them, you don’t announce to the world that you need to sell those shares fast. Why? Because it drives down the value of the shares. Let’s say you put your house on the market. What happens to the value of that house if you tell everyone who comes to view it that you’ve got to sell it as soon as possible because you’ve got to pay your bills? You’ll get offers that are a fraction of what you asked.
It’s difficult enough for a company’s stock to gain any value when it first comes out of bankruptcy, but thanks to Gettelfinger’s stupid comments, he has helped make it even more difficult. That’s not a smart way to make a profit, but we are talking about the president of the UAW.