John Ketzenberger
If Allison is for sale, we know a good buyer

If the management and workers at the Westside Allison Transmission plant use their imaginations, they could buy the business from struggling General Motors.

A leveraged buyout is a gutsy move for sure, but what if it worked? We're talking about employees taking their futures into their own hands in this post-industrial age.
"It's not a silly notion that a division of GM could be LBO'd or spun off," said Mike Bosway, CEO of City Securities here. "There's lots of money out there seeking a place or places to go, and it's not small money. It's huge money."
Last week when colleague Ted Evanoff smoked out the story that GM is preparing stand-alone financials for Allison, it became clear the automaker is considering all options for the unit, including a sale.
That got us wondering about likely buyers, which led to this question: Why not the local management and employees?
There's no question an effort led by the 4,000 people who make high-quality transmissions for dump trucks, tanks and everything in between is a long shot. It's a $2 billion division within GM, according to a study made last year by the Richard Ivey School of Business at the University of Western Ontario.
It's worth considering.
"There are lots of assets there that could support the loan," noted Glenn Scolnik, president and CEO of Hammond Kennedy Whitney, a private equity firm with a major presence here.
OK, so the massive plant and all its machinery give potential lenders peace of mind. And there's lots of private money available. What else?
You need good management and willing employees to adopt a corporate orphan, noted John Aplin, managing director of CID Capital, a private equity firm in Indianapolis.
Midlevel GM execs generally are well regarded by business types, and the 2,500 union employees at Allison turn out highly regarded and time-tested products. Whether they can successfully throw in their lot together is anyone's guess. Neither management nor union representatives returned calls.
But it's likely outside investors would bring financial expertise and a sharp eye for reducing expenses. That likely would mean many United Auto Workers members in the plant would lose their jobs in buyouts, but those who remain would own a piece of the company.
It's a good thing Allison doesn't depend on GM for much business. The Ivey study found just 10 percent of Allison's transmissions end up in GM vehicles. That's good because it's not unthinkable anymore that GM could go bankrupt.
Yes, it's a long shot, but just think if an employee buyout works. The city is headquarters to a global competitor, the fate of jobs is in local hands and the potential wealth is spread among thousands of workers.
All it takes is a little imagination -- and a lot of guts.

So our trucks are between a dump truck and a tank...pretty cool! Allison is too profitable for GM to sell it.

On Edit, employees should own everything, all plants that GM owns. So when they see that their high pay is the result of lower profits, they may take a pay cut to let their businesses survive... too bad people these days don't seem to have what it takes to do the proposed.

On Edit, employees should own everything, all plants that GM owns. So when they see that their high pay is the result of lower profits, they may take a pay cut to let their businesses survive... too bad people these days don't seem to have what it takes to do the proposed. That's one of the reasons the union has fought this proposal every time GM offered stock ownership during past contract negotiations. If the employees have a big stake in the success of the business, they would not need the union to negotiate with themselves, would they?

That's one of the reasons the union has fought this proposal every time GM offered stock ownership during past contract negotiations. If the employees have a big stake in the success of the business, they would not need the union to negotiate with themselves, would they?

Bingo.... see how things might work better without the unions

I am sure that things were better back in the 20`s & 30`s for the working man without unions to!

I am sure that things were better back in the 20`s & 30`s for the working man without unions to!

:rolleyes:

Unions have outlasted their usefullness. now they just take money and shield lazy employees from appropriate disciplinary actions... Whats better, to have a job that pays a living wage or get laid off because the unions have created an environment that a company cannot sustain?

People that do not have union representation have the wages that they do & benefits that they do due to unions negotiating them for the union represented people, The non union companies must pay something close in order to get people to stay when times are good. right now people will work for almost anything to keep a job.I was raised ina union home,union apprenticeship and was always taugt"Give a fair days work for a fair days pay" I take great offense to anyone not living up to the fair days work part and giving unions a bad rap!There is always a few that will abuse the sys. and make it hard on the others.

This was a responce to the failing American automotive company climate on another web thread. I think they drive the point home pretty well.

"No, sorry to break it to you, but the labor unions have placed American car manufacturers in the position they are in. There was a time when they were necessary, but in more recent years, they have extorted such overgenerous worker contracts from the automakers, that the Big Three can't make a car that will compete price-wise with the Japanese carmakers (who are building them in U.S. factories, but with non-Union labor) and maintain the same level of quality control. The simple fact is that thanks to the labor unions, American automakers have much higher overhead to cover, so they can either make cars that are just as good, but cost more, or cost the same, but aren't as good."

Just read a report in NY Times that said workres pension plan is self sustaining due to investment returns, The overwelming pension debt that ALL of the big 3 is complaining about but does not tell all details is the pension debt of the execs,(just under their yearly 15,20 + million a year wages that they get. they will recieve the reat of their life) If the big 3 could resolve that then that would be a good part of the batle,You can not say that the union caused that. If you earn a good living than you can than union representation! What do you think ended the sweat shops of the 20`s,30`s? The employers did not do it by choice.Unions pushed the gov. to passs laws!

Forgot on previus post: Auto compnaies negotiated these contracts and agreed to them nobody held a gun to there head.Now they want to bail out when it is time to pay up what they agreed to.

Forgot on previus post: Auto compnaies negotiated these contracts and agreed to them nobody held a gun to there head.Now they want to bail out when it is time to pay up what they agreed to.

I call B.S.

If threatening to strike and shut down an entire company, resulting in losses of 10's of millions of dollars a day is not holding a gun to someones head, I don't know what is.

I dont disagree with you on pensions owed to employees. If the company agreed to give a person a pension when they were hired in then they should legally have to follow through with it. I also agree that execs (there exsorbenant salaries and golden parachutes) are a problem, but so are the unions. Joe six pack working the line is the one who has the most to lose here, while the Execs and Unions fight to keep themselves in money at the expense of the company.

I deal with some fairly high ranking GM people.You would be suprised how much profit they still make on a truck even with all their "comitments". What it comes down to is greed. 4 years ago it was aprox. 20-25 %.

Henry ford said build a product that your employees can afford to buy.the wages that a line worker makes barely covers that.

What does an average union line worker make for GM?

I know a lot of average line worker's at Boeing (I don't work for them) who
have vacation homes, boats and expensive toys.

Not to mention Longshoreman who can afford Corvettes, fancy homes and you name it.

It all depends on cost of living in a particular area.

cost of living,how many hours a week they work, When the auto industry was doing well, they worked 60-70 hours a week for years. when you figure 1 1/2 time for all overtime that amounts to a good amount a year. Skilled trades worked 80-90 hours a week. So why shouldn`t they have a few extra $? Everyone should earn at least enough of a base wage to have a DECENT place to live,eat, and wheels shouldn`t they? If they work a lot more hours that will and up to a lot more. I Don`t feel it is my place to say what a line worker makes an hour but it is not obsene be by any means.Now that work has slowed down for them, I see alot of them selling all the toys they bought when they were working O.T.

I was just asking, I live in the West, in my area workers are doing well.

if they are only making $15/hour then you are right it would be hard to afford new vehicles or homes.

Right now foreign competition is tough, the big 3 are in trouble.

According to the papers they make about $28/hour, not including overtime or benefits.

$28.00 is a little high,that might be for certain supervisors or averaged out with O.T. or that could be skilled trades( electrians,pipefitters,robot guys,millwrights).Most line workers here in mi. are lower than that(considerably)

Sorry guys, the transmission in our trucks is not made at Allisons in Indy. GM was thinking ahead and spun this trans. to a plant in Mich.

Actually the pick-up truck Allison is assembled in White Marsh, Maryland. The rest are built in Indy.

Hydramatics are built in MI.

I was referring to the truck itself, I am currently working in a hydramatic plant in Warren Mi.

Actually, I was responding to rrdavis.