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Sift Though the Smoke of GM's Union Talks

Investors need to put the media's coverage of negotiations in proper perspective.

Ever negotiate for absolutely anything in life, from a house to a car to an extra stitch of clothing from a street peddler? Typically, while both sides fiddle around and throw out terms they hope the other agrees to, there is only one thing you know for certain: Circumstances are in flux, and there is no way to adequately pinpoint how negotiations will end up.

But before we get to the hilariously discordant reporting on the status of negotiations between

General Motors

(GM) - Get Report

and the United Auto Workers, which are absolutely central to the future of GM and, by extension, to the U.S. auto industry, lean in close and I'll tell you a quick story about how I came to learn about how little can be accurately gleaned from ongoing negotiations.

(The takeaway for investors from all the experience -- the knee-slapping GM-UAW coverage to my own near-Waterloo -- is to proceed with caution on ongoing negation coverage. Never overreact and invest on any single report about how a complex negation, still under way, is about to be settled this way or that.)

Much earlier in my journalism career, I was covering a bus strike for a major newspaper. Negotiations lasted deep into the night, and I, a little inexperienced in strike coverage plus punch-drunk (at that time, an inebriated bus driver was doing an Elvis imitation for our entertainment), called in a report in which I posited, on the basis of information from sources on both sides and my own observations, that the strike was

this close

to being settled.

The deadline came, and, with my report filed, I went home, settling down on the couch and turning on the television, because it was the middle of the night and I was charged up from the Elvis imitator, plus cracking the story.

That is when I dozed and was awakened with a startle by an early morning television news report: The bus drivers had walked out in a huff, and the strike was on!

Sick to my stomach, I ran to get the paper in the hope that all the printing presses in the nation had broken and I was saved. Well, the printing presses were all right, but the good news for the young Maven was that the night editors, wise in the way of negotiations and perhaps cognizant of my non-veteran status, saved my bacon. Without a definite settlement, they rewrote the story with a "who knows?" conclusion instead of my more certain take.

Anyhow, I have nothing specific to say about how the GM-UAW pow-wow might end up. I am not there to talk to sources ... but, of course, even when you're there to talk to sources, you can see how a fluid situation such a high-stakes negotiation can turn in unexpected ways.

Now, to reinforce this lesson, I am just going to turn it over to headlines and leads about Sunday's all-important negotiations. And investors, if you ever allocate money on the strength of negotiation speculation, I will personally see to it that you are forced against your will to watch a night of drunken Elvis impersonation.

Here's what

Reuters

concluded after talks broke up on Sunday: "

GM, union talks adjourn amid signs of progress."

That sounded oh-so-promising. But take a look at

The New York Times

:"

G.M. Talks With Union Said to Be Breaking Down." The lead was just as dire:

"Talks between the United Automobile Workers and General Motors appeared on the verge of collapse Sunday night, even though the two sides had overcome a major sticking point in the negotiations, the creation of the health care trust that would assume responsibility for workers' benefits."

An

Associated Press

story run widely, including on

TST Recommends

CNNMoney.com

, was carefully noncommittal in the headline, but it brought up the possibility of a Monday strike in the sub-headline and lead: "

UAW, GM labor talks at critical point."

The subhead: "Local officials prepare for a possible Monday strike amid conflicting reports from Detroit as no agreement is reached yet in historic talks."

The lead: "Contract negotiations between General Motors Corp. and the United Auto Workers reached a critical point Sunday as local union officials hoped for an agreement but prepared once again for a possible strike on Monday."

Interestingly, in

CNNMoney.com's

own story, things were a little groovier, a strike less likely:

"

Threat of strike at GM appears to ease."

The subhead: "Automaker fails to reach new labor contract with UAW over the weekend, but negotiations ongoing."

The lead: "The United Auto Workers union and General Motors failed to reach a new labor contract despite marathon negotiating sessions over the weekend, but both sides did agree to take a break early Monday, according to GM spokeswoman Katie McBride."

The Wall Street Journal

, unlike the

Times

and, well, some of

CNNMoney.com

, came away with an uplifting take, even mentioning "significant progress" in the negotiations that might assist in curing the American auto industry's inability to compete with Asian companies. Holy jumping the gun, Batman:

Headline: "

GM's Labor Talks Show Progress."

The lead: "General Motors Corp. made significant progress in labor talks with the United Auto Workers yesterday evening, according to people familiar with the negotiations, but differences remained over proposals that Detroit hopes will help it close the gap with Asian rivals."

Although "Who knows what is going on with all this back-and-forth?" isn't great as a story line, it does most accurately capture reality.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;

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