A couple of days ago an article popped up in the Wall Street Journal which I’ve been meaning to highlight but got squeezed for time. I didn’t see it get much play elsewhere, so maybe others didn’t find it as interesting as I. The article noted that as part of their agreement with the government, GM and Chrysler cannot have any labor strikes either pending or threatened from December 31 to February 17. If they do find themselves in this situation, presumably it constitutes an event of default and the loans may be called by the government.

All of this came up in a filing regarding the terms of the loan that GM made with the SEC. According to the Journal, union leaders along with UAW President Ron Gettelfinger were surprised by the covenant.

On Monday, both companies are slated to begin negotiations with the union that will significantly alter current agreements. They have until February 17th to come up with a plan that will improve their long term viability. If they do come up with somenting that is acceptable to Washington (I can’t find anything definite on what that might be) then the two companies would be in line for more loans.

It seems more than passing strange that the car companies never told the unions about this. Since they knew that it would come out sooner or later why not pick up the phone and clue them in? Now, it looks like they were just setting them up and it sure isn’t a good way to get a discussion about how you mutually survive off on the right foot.

But then again, maybe both sides know that this is all a sideshow. The agreement they are working under was crafted by the Bush administration and there will be a new sheriff in town by the time they have to report back. No doubt that there has already been talk with the right people and who knows what winks and nods have taken place.

Nobody, least of all me, knows how this is truly going to play out. Based on the recent history of the TARP it’s likely to be far different from the way it started and for that matter justified. Keeping track of it is going to be fun. It might also be slightly infuriating.