“We think GM will see it as more of an opportunity than a risk to assist in a Delphi bailout, as it will likely be able to extract sizable UAW health care concessions in return,”
“[The letter] suggests that GM is taking a hard-line stance with both Delphi and the UAW, ... As such, we expect the negotiations to go down to the wire, but we still believe an out-of-court restructuring is most likely.”
“While fundamentals are admittedly weak, given the stock's weak recent performance, we are reluctant to get incrementally bearish, particularly ahead of a potential restructuring announcement.”
“[Analysts said Tuesday that the UAW's decision to offer concessions before its contracts with U.S. automakers expire in 2007 shows the gravity of the automakers' financial situation. GM lost more than $3 billion in the first nine months of this year, and Ford is expected to announce a third-quarter loss on Thursday.] Years from now, October 2005 may be looked upon as the month when the relationship between the UAW and the U.S. auto industry began a restructuring, ... This landmark deal may mark a more pragmatic and realistic UAW.”
“We are not that surprised that the company guided down for the first quarter given their previously announced weak production schedules. However, we are surprised by the magnitude of the first-quarter and 2005 revision, which suggests the further risk to production schedules in future periods.”
