Can the UAW keep credit from tumbling?

Sat Jul 1, 2006



Chances of a strike nixing Cerberus's GMAC deal have receded, but the market is still on edge

Nowhere in the industrialized world does organized labor have less power than in the United States. But as equity markets around the world tumbled last month, the stability of the U.S. credit markets - and some of the hedge funds that invest in them - rested not on Federal Reserve Board Chairman Ben Bernanke but on a militant local of the United Auto Workers, which has authorized a strike against bankrupt auto supplier Delphi, the former subsidiary of General Motors.

Some movement in the negotiations among the UAW, Delphi and GM now looks likely to avert a strike, even as it illustrates the fragility of the credit markets. But it was Delphi and GM, not the union, that blinked, when they agreed last month to finance more buyouts for workers who would lose their jobs....

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