Fiat to UAW: Accept pay cuts or no Chrysler deal.
04-15-09, 06:11 PM
#1
Lexus Fanatic
Thread Starter
Fiat to UAW: Accept pay cuts or no Chrysler deal.
It's sink-or-swim time now for Chrysler. Obama has given them just 30 days to reorganize, work out a deal, or it's Chaper 11.
Once again, as before with GM, it looks like it's going to boil down to UAW leadership and its Chrysler members. Fiat is apparantly not kidding...as far as they are concerned, the days of $50-an-hour factory jobs are gone. So now many workers are going to have to decide which is more important.....a lower-paying job or no job.
I'm not taking any personal positions myself on the issue, not because I don't care for the workers or their families, but simply because Chrysler vehicles, in general, don't impress me. Fiat vehicles, before they left the American market over 20 years ago, didn't either....of course, I haven't seen many of the newer Fiats to judge.
If Chrysler falls, the way I see it, I would have to have some sympathy for those who lost their jobs (if they voted for the pay cuts but were outvoted by those who stood firm), but, except for the nice-looking styling of the Dodge Challenger (a car I grew up with 40 years ago) and the Chrysler 300, I wouldn't shed any tears at the company's loss. And, even the nice-looking Challenger and 300 have a lot of flimsy sheet metal, trim, and parts.
http://www.businessweek.com/bwdaily/...n_id=rss_daily
Fiat (FIA,MI) Chief Executive Sergio Marchionne said in an interview published on Apr. 15 that unless the labor unions representing workers employed by Chrysler in the U.S. and Canada agreed to wage and work-rule concessions in the next two weeks, he will walk away from a proposed alliance between his company and the struggling U.S. automaker.
In remarks reported in the Toronto Globe & Mail Wednesday, Marchionne said he is demanding wages and work rules at parity with workers employed by Toyota and Honda in Canada and the U.S. "Absolutely, we are prepared to walk," Marchionne said.
Chrysler is facing an Apr. 30 deadline to reach agreements with the United Auto Workers and Canadian Auto Workers, as well as banks and hedge funds holding $6.9 billion of the automaker's secured debt. It must also strike a deal with Fiat. If Chrysler's majority owner, Cerberus Capital Management, can't line up the agreements it needs, the White House, which has lent Chrysler $4 billion to keep it from insolvency, will not lend any more. The result is expected to be a Chapter 11 filing for the storied automaker.
If Cerberus can satisfy the White House with a raft of concessions from all parties, then it will get a $6 billion loan, enabling an alliance with Fiat to go forward.
Chrysler Needs Small Cars
Marchione's words were his toughest yet for the union. "The minute you talk to me about historical entitlement in an organization that is technically bankrupt, it's a nonsensical discussion," he told The Globe & Mail.
Fiat is hoping to use Chrysler's distribution network in the U.S. and Canada to sell Fiat and Alfa-Romeo vehicles. In addition, Chrysler wants vehicles developed by Fiat on which it can slap Chrysler, Dodge, and Jeep nameplates. Chrysler also wants to develop distinctly new vehicles using vehicle engineering shared with Fiat.
Each party has its own motivations to get the deal done and satisfy the White House:
• The unions do not want to match the foreign-owned transplant factory wages, rules, and benefits. In the U.S., though, the UAW is willing to take equity in Chrysler in exchange for about $4 billion of the $8 billion that Chrysler owes the union's health-care trust fund.
• Banks that hold $6.9 billion of Chrysler's debt—secured by factories, Chrysler's brands, and real estate—are being asked to take just $1 billion instead. But the banks also want equity in the company to try to recoup their investments if the Fiat alliance works.
• Fiat, in exchange for sharing technology, engines, and vehicle engineering valued at around $10 billion, wants 20% of Chrysler with an option to boost its stake to than 50% later, on top of the concessions from banks and the unions.
It all adds up to a tense game of poker between all parties, with the White House's deadline looming over the negotiating table. It is also a situation that labor unions have seen before: being told to take the deal on the table or the company will go away and take all the jobs and future health-care payments with it.
Unions in a Bind
"The union faces a very tense and difficult outcome here," says Gary N. Chaison, professor of industrial relations at Clark University in Worcester, Mass. "They risk being blamed for driving the company into bankruptcy—and then losing the jobs and benefits on top of that."
But Chaison argues that by giving in to the demands, the union will be validating the arguments of its fiercest critics in Congress. Those critics have been saying for months that wages and benefits demanded by the union are what put General Motors (GM) and Chrysler into the situation of needing government bailout funds or facing bankruptcy in the first place.
UAW officals could not be reached at press time. But Ken Lewenza, president of the CAW, said the union was taken aback by Marchionne's comments. "I woke up this morning to find yet another spokesperson speaking for Chrysler, and someone whom we have not been dealing with at all in these negotiations," said Lewenza. The union chief said he was surprised to hear that the CAW was such a big obstacle to completing Fiat's alliance with Chrysler, since U.S. banks holding the automaker's debt and the UAW had yet to come to terms.
Lewenza said the CAW was against total parity of labor costs with foreign-owned auto plants, but added that the agreement the union struck with GM on salary and benefits for "active workers" was "in the ballpark" compared with non-union plants. "But to compare the costs of maintaining agreements with retirees to the costs at these plants, which basically have no retirees, is comparing apples to oranges," said Lewenza.
In 2007, the UAW agreed to lower sharply the starting wages and benefits for newly hired autoworkers at the Detroit companies, as well as for workers in jobs away from the assembly line, such as janitors and maintenance employees.
But the cuts did not affect most longtime union members, whose hourly pay and other compensation adds up to about $55 an hour. The figure ranges above $70 an hour when the automakers' costs for health care for retired workers and retirement benefits are factored in. By contrast, workers in U.S. plants run by foreign companies, such as Toyota and Nissan, earn about $45 an hour, and the nonunion companies do not have the hefty burdens of future "legacy costs" for pensions and retiree health care that the Detroit companies face.
Chrysler has demanded that CAW workers trim labor costs by 25.7%, to match what it pays at its U.S. plants. So far, the union is offering a concession of only a $7 to $7.25 per hour, a deal it has already given GM.
Puzzle for Union Members
If the unions in the U.S. and Canada agree to total parity with their nonunion peers, it raises a more fundamental question for union members: What exactly am I paying union dues for anyway?
An agreement to total-parity wages and benefits, says Chaison, would greatly affect the union's ability to organize those foreign-owned assembly plants in the future. It would also hit workers in other industries the UAW represents, such as casino and child-care workers—two groups that have been making up, in part, for lost auto-worker members.
Says Chaison: "Workers will be asking themselves what the point of the union is if so much of the outcome is out of their control."
Even if Fiat gets the worker concessions it's seeking, it faces more challenges ahead. "These companies face a huge marketing problem.… It isn't as if people are going to start buying GM and Chrysler cars again because the union is at total parity with nonunion workers at Toyota," says Chaison.
Kiley is a senior correspondent in BusinessWeek's Detroit bureau.
Once again, as before with GM, it looks like it's going to boil down to UAW leadership and its Chrysler members. Fiat is apparantly not kidding...as far as they are concerned, the days of $50-an-hour factory jobs are gone. So now many workers are going to have to decide which is more important.....a lower-paying job or no job.
I'm not taking any personal positions myself on the issue, not because I don't care for the workers or their families, but simply because Chrysler vehicles, in general, don't impress me. Fiat vehicles, before they left the American market over 20 years ago, didn't either....of course, I haven't seen many of the newer Fiats to judge.
If Chrysler falls, the way I see it, I would have to have some sympathy for those who lost their jobs (if they voted for the pay cuts but were outvoted by those who stood firm), but, except for the nice-looking styling of the Dodge Challenger (a car I grew up with 40 years ago) and the Chrysler 300, I wouldn't shed any tears at the company's loss. And, even the nice-looking Challenger and 300 have a lot of flimsy sheet metal, trim, and parts.
http://www.businessweek.com/bwdaily/...n_id=rss_daily
Fiat (FIA,MI) Chief Executive Sergio Marchionne said in an interview published on Apr. 15 that unless the labor unions representing workers employed by Chrysler in the U.S. and Canada agreed to wage and work-rule concessions in the next two weeks, he will walk away from a proposed alliance between his company and the struggling U.S. automaker.
In remarks reported in the Toronto Globe & Mail Wednesday, Marchionne said he is demanding wages and work rules at parity with workers employed by Toyota and Honda in Canada and the U.S. "Absolutely, we are prepared to walk," Marchionne said.
Chrysler is facing an Apr. 30 deadline to reach agreements with the United Auto Workers and Canadian Auto Workers, as well as banks and hedge funds holding $6.9 billion of the automaker's secured debt. It must also strike a deal with Fiat. If Chrysler's majority owner, Cerberus Capital Management, can't line up the agreements it needs, the White House, which has lent Chrysler $4 billion to keep it from insolvency, will not lend any more. The result is expected to be a Chapter 11 filing for the storied automaker.
If Cerberus can satisfy the White House with a raft of concessions from all parties, then it will get a $6 billion loan, enabling an alliance with Fiat to go forward.
Chrysler Needs Small Cars
Marchione's words were his toughest yet for the union. "The minute you talk to me about historical entitlement in an organization that is technically bankrupt, it's a nonsensical discussion," he told The Globe & Mail.
Fiat is hoping to use Chrysler's distribution network in the U.S. and Canada to sell Fiat and Alfa-Romeo vehicles. In addition, Chrysler wants vehicles developed by Fiat on which it can slap Chrysler, Dodge, and Jeep nameplates. Chrysler also wants to develop distinctly new vehicles using vehicle engineering shared with Fiat.
Each party has its own motivations to get the deal done and satisfy the White House:
• The unions do not want to match the foreign-owned transplant factory wages, rules, and benefits. In the U.S., though, the UAW is willing to take equity in Chrysler in exchange for about $4 billion of the $8 billion that Chrysler owes the union's health-care trust fund.
• Banks that hold $6.9 billion of Chrysler's debt—secured by factories, Chrysler's brands, and real estate—are being asked to take just $1 billion instead. But the banks also want equity in the company to try to recoup their investments if the Fiat alliance works.
• Fiat, in exchange for sharing technology, engines, and vehicle engineering valued at around $10 billion, wants 20% of Chrysler with an option to boost its stake to than 50% later, on top of the concessions from banks and the unions.
It all adds up to a tense game of poker between all parties, with the White House's deadline looming over the negotiating table. It is also a situation that labor unions have seen before: being told to take the deal on the table or the company will go away and take all the jobs and future health-care payments with it.
Unions in a Bind
"The union faces a very tense and difficult outcome here," says Gary N. Chaison, professor of industrial relations at Clark University in Worcester, Mass. "They risk being blamed for driving the company into bankruptcy—and then losing the jobs and benefits on top of that."
But Chaison argues that by giving in to the demands, the union will be validating the arguments of its fiercest critics in Congress. Those critics have been saying for months that wages and benefits demanded by the union are what put General Motors (GM) and Chrysler into the situation of needing government bailout funds or facing bankruptcy in the first place.
UAW officals could not be reached at press time. But Ken Lewenza, president of the CAW, said the union was taken aback by Marchionne's comments. "I woke up this morning to find yet another spokesperson speaking for Chrysler, and someone whom we have not been dealing with at all in these negotiations," said Lewenza. The union chief said he was surprised to hear that the CAW was such a big obstacle to completing Fiat's alliance with Chrysler, since U.S. banks holding the automaker's debt and the UAW had yet to come to terms.
Lewenza said the CAW was against total parity of labor costs with foreign-owned auto plants, but added that the agreement the union struck with GM on salary and benefits for "active workers" was "in the ballpark" compared with non-union plants. "But to compare the costs of maintaining agreements with retirees to the costs at these plants, which basically have no retirees, is comparing apples to oranges," said Lewenza.
In 2007, the UAW agreed to lower sharply the starting wages and benefits for newly hired autoworkers at the Detroit companies, as well as for workers in jobs away from the assembly line, such as janitors and maintenance employees.
But the cuts did not affect most longtime union members, whose hourly pay and other compensation adds up to about $55 an hour. The figure ranges above $70 an hour when the automakers' costs for health care for retired workers and retirement benefits are factored in. By contrast, workers in U.S. plants run by foreign companies, such as Toyota and Nissan, earn about $45 an hour, and the nonunion companies do not have the hefty burdens of future "legacy costs" for pensions and retiree health care that the Detroit companies face.
Chrysler has demanded that CAW workers trim labor costs by 25.7%, to match what it pays at its U.S. plants. So far, the union is offering a concession of only a $7 to $7.25 per hour, a deal it has already given GM.
Puzzle for Union Members
If the unions in the U.S. and Canada agree to total parity with their nonunion peers, it raises a more fundamental question for union members: What exactly am I paying union dues for anyway?
An agreement to total-parity wages and benefits, says Chaison, would greatly affect the union's ability to organize those foreign-owned assembly plants in the future. It would also hit workers in other industries the UAW represents, such as casino and child-care workers—two groups that have been making up, in part, for lost auto-worker members.
Says Chaison: "Workers will be asking themselves what the point of the union is if so much of the outcome is out of their control."
Even if Fiat gets the worker concessions it's seeking, it faces more challenges ahead. "These companies face a huge marketing problem.… It isn't as if people are going to start buying GM and Chrysler cars again because the union is at total parity with nonunion workers at Toyota," says Chaison.
Kiley is a senior correspondent in BusinessWeek's Detroit bureau.
04-15-09, 06:17 PM
#2
Lexus Test Driver
no great loss if they do end up going belly up...
if they were smart from the beginning, they would have shaped up and built vehicles PEOPLE WANT TO BUY....
GM and ford have begun making better products that are more interesting and geared towards the needs/wants of consumers...both have made plans to ensure their future, and have alot of good ideas on the horizon..
chrysler has nothing.
if they were smart from the beginning, they would have shaped up and built vehicles PEOPLE WANT TO BUY....
GM and ford have begun making better products that are more interesting and geared towards the needs/wants of consumers...both have made plans to ensure their future, and have alot of good ideas on the horizon..
chrysler has nothing.
04-15-09, 06:48 PM
#4
Lexus Fanatic
Thread Starter
no great loss if they do end up going belly up...
if they were smart from the beginning, they would have shaped up and built vehicles PEOPLE WANT TO BUY....
GM and ford have begun making better products that are more interesting and geared towards the needs/wants of consumers...both have made plans to ensure their future, and have alot of good ideas on the horizon..
chrysler has nothing.
if they were smart from the beginning, they would have shaped up and built vehicles PEOPLE WANT TO BUY....
GM and ford have begun making better products that are more interesting and geared towards the needs/wants of consumers...both have made plans to ensure their future, and have alot of good ideas on the horizon..
chrysler has nothing.
Chrysler, though, has had an annoying habit, for many years, of rather poor sheet-metal, trim, and hardware quality. Their vehicles may look good, but often feel like they are built out of paper. Some of them (fortunately, not all) have been quite unreliable as well.
04-15-09, 08:39 PM
#6
Tech Info Resource
iTrader: (2)
I will miss the Viper. Nothing else. It's one of only two American made pure performance cars, and it's a world beater.
04-15-09, 08:59 PM
#7
Lexus Fanatic
Finally someone will show the UAW that to make 50 dollars an hour + health benefits you need to be educated or at least trained in something that a monkey/stoned teenager cant learn to do in less than 10 minutes. Give me a break. Even if they are knocked down to the $45/hour compensation of the competition they are still paid way to much. Look at the videos of the stuff these people do. Its a joke. It requires no real skill , talent, or even mental capacity. They wear street clothes on the job. Literally any BS they want to put on and go to work in is fine. After watching the saving GM video twice and seeing some footage of the inside of Chrysler and Ford plants, I feel that these people have to be some of the most over paid people I have ever seen.
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04-15-09, 09:12 PM
#8
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I want my Brera!!! Chryco listen!! UAW listen! sooner than later you will have to cut wages and the longer you protest the more you will have to cut. Instead of being stuck up acknowladge that times are tough for everyone and people have to sacrafice just to survive also do not forget that Chryco is in very bad shape and a reputable Italian company with cars that actualy sell wants to come in and work with you to help you make a car that a the European and Japaneese car conasuer will buy enjoy and stick with.
04-15-09, 09:22 PM
#9
Lexus Fanatic
Its amazing to me that Fiat is trying to save them but the deal is being soured/ stalled by the clown at UAW. They are like parasites. They would rather to literally bleed the host dry before letting up
04-15-09, 09:30 PM
#10
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I like the way you put, they truley are a parasite. The point of a union is to look after the employee's and make sure that enviorment is safe they get paid a fair wage and have some form of health care. But what the UAW is doing is terrible, they are running these companies that or on theyre death down to morgue. These union leaders are geting rich while Chryco GM and not so much Ford are begging the goverment for help!!!
04-15-09, 09:53 PM
#11
Lexus Fanatic
Finally someone will show the UAW that to make 50 dollars an hour + health benefits you need to be educated or at least trained in something that a monkey/stoned teenager cant learn to do in less than 10 minutes. Give me a break. Even if they are knocked down to the $45/hour compensation of the competition they are still paid way to much. Look at the videos of the stuff these people do. Its a joke. It requires no real skill , talent, or even mental capacity. They wear street clothes on the job. Literally any BS they want to put on and go to work in is fine. After watching the saving GM video twice and seeing some footage of the inside of Chrysler and Ford plants, I feel that these people have to be some of the most over paid people I have ever seen.
UAW autoworkers are not payed or their take home pay is not anywhere near $50 an hour, every news source seems to exaggerate their pay for some reason. You start out at around $23hr + 5%-10% shift diff and COL and they max out around $27-$30 an hour. It is all the benefits and the retirement costs is where all these sources get these $50-$70 an hour wages. My good friend has been working at GM for 13 years and makes around 60-72K a year depending on overtime, he has never made anywhere near 100K a year like he would if he was paid $50+ per hour. UAW hourly pay is not all that much more then what is paid at Toyota/Honda plants in the US and those workers in those foreign plants get very big bonuses at the end of the year which makes it even closer, I believe the Camry plant has paid 10K yearly bonuses before. It is just the benefits and retirement don't cost anywhere near as much in the foreign plants. European autoworkers are paid much more then UAW autoworkers, even Japanese autoworkers are paid well and have strong unions.
I don't think at $23-$30 UAW autoworkers are over paid and think it is a fair wage considering how crappy the jobs are and the poor conditions day in and day out in those plants and don't think their hourly pay needs to really go down by much. The benefits and retirement is what needs to be cut heavily as that is what adds some of the highest costs and some of those contracts need to be renegotiated. I think they should pay them a few more dollars an hour and just make them get their own health insurance as employee provided health insurance is one of the big reasons healthcare/insurance is so expensive.
I know alot of people get mad at the autoworkers but think what if it was you who was facing wage/benefit cuts, I am pretty sure you would fight against it, especially if a bunch of people who have never done your job think you are so way overpaid when you are really just making a solid middle class wage and nothing spectacular. It is really the white collar executives, managers, engineers, and CEO's at the big three that are way overpaid and more to blame for the big 3s poor products/decisions and the situation they are in now but the UAW does share blame too and needs to be more flexible when their companies are at stake.
Last edited by UDel; 04-16-09 at 10:16 AM.
04-16-09, 06:21 AM
#13
Lexus Test Driver
It is what it is, at the end of the day, the only thing that counts is how many cars can you sell. If Chrysler is making cars that no one wants to buy, the workers should take a pay cut. This includes the engineers, line workers, managers and the CEOs. The company as a whole has fail and all should take the blame.
04-16-09, 10:12 AM
#14
Lexus Fanatic
, if you are going to say that then everybody in this country or around the world who makes a decent middle class wage and buys those sweatshop sneakers should be ashamed because kids in those sweatshops in third world countries make 25 cents a day.
04-16-09, 10:43 AM
#15
So you are trying to say that because their jobs are so simple and boring thus they should get paid more than other more interesting and complicated positions?
WHAT THE...
Spin it all you want but when a job that only requires a high school diploma with minimal training is getting paid the same as a job that requires at least a master's degree in engineering then something is wrong.
It's really as simple as that.