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One Month Down, Two To Go For GM And Chrysler

General Motors
CNBC.com
General Motors

For GM and Chrysler, this is when the good stuff will start happening.

After a month of seeing relatively little from GM and Chrysler about how they plan to restructure their operations, we could be on the verge of a couple busy months.

Get ready for the push and pull of these auto makers trying to re-work their corporate debt, re-do labor contracts, strike alliances, and yes, meet the specifications of the Obama administration "Auto Czar" and auto team.

So what's actually changed in the last month?

Publicly, not much. Sure, the UAW has agreed to suspend the jobs bank program, but in reality, that program is not that big of a deal. Yes, for many outside of the auto industry it is symbolic of the Big 3 being inefficient. Still, there will be only a limited impact on the bottom line for stripping out a program that pays laid off workers as they work on transitioning to a new job.

Meanwhile, Chrysler has agreed to a strategic alliance with Fiat which is being hailed as a move to improve viability. In exchange for getting 35% of Chrysler, Fiat will help the American auto maker develop smaller fuel efficient models for the U.S.

The jury is still out on how much that will help Chrysler.

Privately, much is happening at GM and Chrysler. GM is working with a bondholders committee on how to re-structure billions in corporate debt and both companies are meeting with the UAW on establishing new, more competitive labor contracts. And at both headquarters, executives are scrambling to make sure they are ready to show them moving toward viability by February 17th.

By then, we will likely have an auto czar and Obama administration auto team in place. When they are in place, then we will learn more about what GM and Chrysler are expected to do by March 31st.

Two months to go guys.

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