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Analysis

Why investors should skip the GM IPO Add to ...

Besides the wage issue, there is mounting pressure on the UAW from its members and from other unions to demand that benefits lost during the auto crisis be restored.

"The three major US (auto) companies are making profits again . we demand that they do right by the workers who have done right by them," Richard Trumka, president of the AFL-CIO, said in a speech at the UAW's major convention last summer. "Because just as there has been shared sacrifice in periods of pain, there must be shared prosperity in periods of gain."

4 - ELECTRIC VEHICLES AREN'T A SAVIOR

After a decade of selling Hummers, GM must change its image and become greener. It's heading in the right direction: The Chevrolet Volt, which can go 40 miles on battery power alone, will debut in showrooms next month.

But there's no guarantee GM can afford to continue to invest in electric vehicles or other green technologies. And much like the Toyota with its Prius, GM probably won't make money on the Volt until the third or fourth generation. It was a gamble Toyota was willing to make because the company believed hybrids would catch on eventually, and having the first fully functional hybrid would give Toyota a green image with consumers.

GM is betting the Volt will provide a similar kind of green halo over its cars.

The company is waiting for approval on an application for $14.4-billion from the Energy Department to help renovate older plants to make fuel-efficient vehicles. That money may never come, GM says. Its first application for the funds was made before bankruptcy, and was denied because the Energy Department said GM couldn't prove it was a viable company.

"If our future operations do not provide us with the liquidity we anticipate, we may be forced to reduce, delay, or cancel our planned investments in new technology," the company says.

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