By on April 29, 2009

It’s getting to be sports metaphor time for the ChryCo deal: the fourth quarter, the ninth inning, the obese lady’s vocal warm-ups. Automotive News [sub] quotes a White House spokesperson as saying “hurdles still remain, but we remain optimistic and hopeful that something in the next many hours will get done that will provide a pathway for Chrysler’s viability without continued government assistance.” Maybe the White House should read more news. And not just assurances from the UAW’s Ron Gettelfinger who sounds downright thrilled at the possibility of seeing his union gain a controlling stake in ChryCo. No, The Detroit News points out that a grassroots UAW effort to scuttle the deal (which must still be ratified by a full union vote) is underway. “It’s time to stop the concessions. Send them back to the table. We need a week to see the agreement before the vote. Jeep workers should be allowed to vote. Vote no,” runs a letter being circulated amongst UAW workers. Why so confrontational? The (proposed) lack of confrontation.

The Detroit Bureau reports that the new Chrysler arrangement, with the UAW controlling management, is causing concerns among rank-and-file workers. Most of the concerns come from a waiver of the right to strike for several years, a move that many employees worry they “have no choice but to accept.” According to the DB, the “contract calls for binding arbitration on economic provisions for any contract negotiated in 2011. The same provision would apply again in 2015, if Chrysler still owed money to the US government, and the union wages have to be in line with those paid at other auto plants in the US . . . including foreign-owned manufacturers.” And perhaps workers should accept these terms, considering the labor relations tragedies that defined the British Leyland nationalization/restructuring/epic fail experience.

But stripping away the UAW’s most powerful tactic in exchange for union ownership raises real question of whether the UAW even is a union at all anymore. Just don’t bring that semanticist whining to UAW President Ron “I Rule You” Gettelfinger. “We fought to maintain our wages, our health care and our jobs,” wrote Gettelfinger with his union boilerplate thesaurus firmly in hand. “In the face of adversity, we secured new product guarantees, and we negotiated new opportunities for UAW involvement in future business decisions.” Translated into English, this means that the UAW effectively no longer exists, having become a management partner. The question of whom will negotiate with whom and in whose interests is unsurprisingly scaring a number of UAW members.

Throw bondholder holdouts into the equation, and you may just begin to hear the fat lady’s warbling become slightly louder.

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14 Comments on “Chrysler, UAW Dream A Dream: No Strikes (and They’re Out)...”


  • avatar

    Speaking of Chrysler, the chapter 11 filing will probably be tomorrow…

  • avatar
    Bill Wade

    I can see it now, the UAW striking itself.

  • avatar
    Sutures

    Between GM and Chrysler, this is turning out to be the worst pulp murder mystery ever. Everyone has a grudge and weapon, we just need someone to break down and own up to killing the victim(s).

  • avatar
    MikeInCanada

    It’s time to check in with the Soldiers of Solidarity to see how our union brothers and sisters are doing today….

  • avatar
    Bunter1

    Sutures- The MSM will file it under “Unsolved mysteries”, if they can’t hang it on GW.

    I must admit, the prospect (however slim) of the UAW negotiating with itself and discovering that auto manufacturing is not a magic money tree in a workers paradise is delightful.

    Whom could they blame? They would have to survive until they get another republican administration at the least!

    Chuckle.

    Bunter

  • avatar
    pb35

    “It’s the final countdownnnnnnn…..”

  • avatar
    CommanderFish

    As futile as it may be, I do give Auburn Hills credit for trying SOMETHING.

    GM’s latest attempt at recovering has just been to slash brands. So they cut Pontiac, Saturn, Hummer, and Saab, but they still have 2 separate dealership networks to supply for. So, that accomplished a whole lot of nothing. What next, permanent government ownership? Yeah, that’s a good business plan.

  • avatar
    CopperCountry

    We REALLY need the UAW to take a controlling stake in Chrysler. It’d be a wonderful teaching moment for the U.S. – perhaps it would cause us to consider whether Socialism and Liberty can really co-exist afterall. Not that Socialists can’t build a very nice car (e.g. BMW). But BMW management doesn’t have IG Metall telling it which cars to develop and how to build them (although, their involvement may have been helpful in avoiding the whole Bangle Era).

    If we as a country can learn something from this $10B mistake (and avoid making the same mistake in the future) it will be well worth the money.

  • avatar
    CopperCountry

    We REALLY need the UAW to take a controlling stake in Chrysler. It’d be a wonderful teaching moment for the U.S. – perhaps it would cause us to consider whether Socialism and Liberty can really co-exist after all. Not that Socialists can’t build a very nice car (e.g. BMW). But BMW management doesn’t have IG Metall telling it which cars to develop and how to build them (although, their involvement may have been helpful in avoiding the whole Bangle Era).

    If we as a country can learn something from this $10B mistake (and avoid making the same mistake in the future) it will be well worth the money.

  • avatar
    Luther

    Excellent artical Edward!
    Is Obama a closet freewill/free-market man who is also a good poker player? Or is he an idiot?

  • avatar
    windswords

    Luther:

    “Is Obama a closet freewill/free-market man who is also a good poker player? Or is he an idiot?”

    He’s the latest Soft Drink that is so refreshing, at least until the fizz runs out.

  • avatar
    dgduris

    “We need a week to see the agreement before the vote. Jeep workers should be allowed to vote.”

    Wow! At least you can say that the UAW wants to read what they’re getting us into. Can’t say the same for the Dems in congress on the porkulus bill.

    @windswords – brilliant metaphor for such a pop-culture society as America has become!

  • avatar
    AndrewDederer

    This isn’t exactly unprecedented. In fact, it pretty much par for the course when a company has large downstream obligations to their employees. This is pretty much the same sort of “employee take-over” as happened to a bunch of airlines over the last 15-20 years. Some of them survive, more than a couple didn’t live past the next problem issue.

    This kind of thing happens when the debt-holders and the obligation holders don’t agree whether the company’s viable. The UAW boys aren’t going to get anywhere near what they are owed in a breakup, and neither are the bond-holders. The bond-holders want to take the most they can get for sure (whatever is left after chapter 7) it’s much more certain. The UAW guys have to at least float taking equity, whether it’s a good idea or not, it’s the only way they can possibly (and only possibly) get something close to what the contract says/said. The bond-holders are just looking to get away from the table with as small a loss as possible (they can find another game), for the UAW, this is the only game in town they have to offer to keep playing, even if the odds stink.

  • avatar
    VanillaDude

    The lady whose photo you have used is the brilliant, but no longer fat, Debra Voigt. She is one of the world’s greatest voices. After she gotten as large as the photo above, she lost over 150 pounds and returned to the stage to take the roles that directors said she was too fat before to take.

    You see, you can be a car guy, and a classy car guy at the same time!

    Debra Voigt


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