Dividends and the GM strike

The President in his rallies loves to talk about how he won the Presidency and it includes appealing to the manufacturing base in Ohio and Michigan. In what seems a generation ago, one of the GM’s executive said to the effect, as GM goes so does the country. Times have changed and the workers in GM have gone on strike. The economy as a whole will continue on.

The GM workers saw GM almost go to bankruptcy, have the government write off their debts and emerge as a profitable company. The workers are asking where is their rewards or a bigger piece of the pie. GM has offered the workers higher wages, a signing bonus of $8,000 and continued investments in the US. (Remember under the biggest tax cut in US history, the President thought $1,000 a worker was going to stimulate the economy, it did not because most of the cut went to corporate America).

GM has an effect on supplier company because as a company a number of years ago, it contracted out most of the parts. The company focuses on engineering and putting together the parts. As the parts company slow down orders, the ripple effect to the economy will show in the economic health indicators.

Linking to dividend paying stocks, for a number of years union workers have been beaten down, suggesting there are many dissatisfied employees in the workforce. In the past couple of years, unemployment rates have fallen and this maybe the time workers gain a larger share of the economic pie. In the investments you own, how does the company treat the workers to satisfy customer’s expectations?

There are more questions than answers, till the next time – to raising questions.

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