Transcript: Cash in Hand

This is a partial transcript from "Your World with Neil Cavuto," March 22, 2006, that was edited for clarity.

NEIL CAVUTO, HOST: General Motors (Pete Najarian of Inside Options and Bill Adams, president of a labor relations company.

Bill, what do you think?

BILL ADAMS, PRESIDENT, ADAMS, NASH, HASKELL & SHERIDAN: I don't think so. I think it's the beginning of the end for the autoworkers. It is another 5 percent reduction in their membership rolls. And they are just delaying the inevitable.

CAVUTO: Why would this be the beginning of the end?

ADAMS: Well, I mean, it's emblematic of a major problem.

For the last 70 years, they have been a partner with the big three, and it hasn't worked. They keep making cars that nobody wants to buy and charge too much for them.

CAVUTO: All right. But, Pete, you know what is interesting about this? The United Auto Workers union went along with this, signed off on it.


CAVUTO: What does that tell you?

NAJARIAN: It tells me that they understand that the problems at GM are far greater than any of us really acknowledge right now. I think the possibility of bankruptcy is not that remote. And people think it is all smoke and mirrors. They thought the same with Northwest Airlines. They thought the same thing with United Airlines.

If you ask those Northwest mechanics, when they went on strike, was that a good decision, or would they have liked to have taken a payoff, I guarantee you, they would have liked to have taken the payoff, because, right now, the answer is the payoff.

Otherwise, the situation is this, Neil: With a 9 percent yield, almost 10 percent yield on the bonds, they did not move today. There still is concern out there of a possible bankruptcy. And if you look at some of the put activity that we have seen over the last several months, the 2002 puts, the obligation to sell the stock at $10...

CAVUTO: You know, Pete, you are an expert on this stuff. Bottom line, you're right. Wall Street was not impressed with either the stock or the bond.

But, Bill, let me ask you this: Is there a sense that you have that unions sort of grudgingly had to take this, because the only alternative is no job at all?

ADAMS: Oh, absolutely. They had no choice in it. It would have just sped the process along, had they not taken it.

But, you know, the key word that people are using is "now." You are going to cut these 30,000 people loose. I think that the average age of GM workers is about 50. And their average length of service is 24 years. So, they cut them loose with $100,000 — or 140,000 bucks right now. They are going to live for another 40 years. And check the job markets for 50-year-olds. It's not very good.

CAVUTO: All right. Well, you raise a good point, Bill.

It's not as if they're going to empty-handed, though. They do get that. They also get their pension. They are not getting the health benefits. You are right to point that out.

But, Bill, let me ask you, do you think that the 30,000 figure that they want to get, that is, the number of layoffs that they want from this, will be low, that, in other words, more people will take advantage of this than we ever fathom, maybe 50,000?

ADAMS: Well, they might. You know, they could get 100,000. And then there is nobody to make the cars.


CAVUTO: Bill, that is a good point, too.

Pete, how close are we to that? That this is such a good deal that they might run?

NAJARIAN: Well, they're not going to get 100,000, because, quite frankly, not everybody is 50 years old that is working there.

But I think, if you are 50-plus, you are definitely going to have to consider this, because what are your alternatives right now? You have skill. You can still go somewhere and pick up a job, potentially, and then pick up those health care benefits — that is really the critical point for these folks.

CAVUTO: All right.

ADAMS: Yes, but they are giving up their retiree health insurance, as I understand the deal. And they're not going to get that in many places. Employers are not doing that.

CAVUTO: All right, gentlemen, thank you both. Pete and Bill, thank you, guys.

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