By on September 16, 2011

Chrysler CEO Sergio Marchionne’s petulant letter to UAW President Bob King sounded to me like a man angry with being kept waiting after a long flight, but according to the Detroit News, it has “derailed” the “carefully crafted timeline” for contract negotiations. To wit:

Sources close to the negotiations told The Detroit News that a deal was imminent with General Motors Co. when Chrysler CEO Sergio Marchionne sat down at his Mac computer and fired off a sharply worded letter to UAW President Bob King at 10 p.m. Wednesday, accusing the union leader of violating their gentlemen’s agreement to sign off on a deal by the 11:59 p.m. deadline.

Shortly after the letter was sent, talks stopped at both companies.

Chrysler and the UAW agreed to extend their current contract for one week. Talks resumed Thursday between the two sides, but nothing of substance is being discussed at the bargaining table, according to people familiar with the talks.

Actually, that’s not exactly what everyone is reporting…

For example, the latest word from the aces at Reuters‘ Detroit Bureau has it that

General Motors Co and the United Auto Workers union have made “good progress” toward an agreement, a person familiar with the talks said on Friday as negotiations resumed.

Talks also continued at Chrysler Group LLC on Friday morning.

The UAW has chosen to attempt an agreement with No. 1 U.S. automaker GM first, before then reaching a deal with Chrysler and finally with Ford Motor Co, those close to the talks have said.

Bloomberg seems to agree, quoting the UAW’s favorite labor expert, Berkeley’s Harley Shaiken, saying

What we’re looking at right now isn’t a breakdown in the process, it’s the process working it’s way through to an agreement. Going over the deadline has become more routine than not.

But while the big wire services emphasize business-as-usual in the UAW negotiations, the Detroit papers are losing their heads over Marchionne’s provocative letter. The Freep reports that the UAW could skip past Chrysler and go straight to Ford after securing a deal with GM… or, not.

The letter, while dramatic and emotional, probably won’t trump the logic of completing talks with Chrysler before Ford, said Joel Cutcher-Gershenfeld, dean of labor studies at the University of Illinois.

Meanwhile, the Freep also spoke to Chrysler workers who blame Marchionne for an inability to compromise and King for standing up the CEO and failing to communicate with the union rank-and-file. And once again, the lesson is the same: the letter stirred up tensions, but…

“I would not fixate on the letter,” said Joel Cutcher-Gershenfeld, dean of the University of Illinois school of labor and employment relations. “The UAW will be judged on the agreements that it reaches.”

U mad, Freep? Because this is starting to look a little like what we in the “online journalism” business call “trolling.” Luckily the Detroit-area media, the DetN has Dan Howes on hand to provide a more measured analysis of events.

Could both sides — namely, those directly bailed out by taxpayers — cut a deal by the deadline of midnight Wednesday without public rancor?

That was the plan, but the answer to the last question is no: An existential crisis, the harsh glare of national attention and the specter of presidential politics apparently are not enough for bargainers to hit a date that has loomed for four years. Meaning some things in this town never change.

Incidentally, I hear editors at the Detroit papers enforce strict rations on the phrase “some things in this town never change”… and Howes picked a good opportunity to cash in his chit. He concludes

For the UAW, a successful conclusion to these talks — and a coming showdown with Ford, whose members are not barred from striking by terms of a federal bailout — represents a down payment of sorts on King’s vision for an extreme makeover of the union of Walter Reuther, the Sit-down Strikes and the Battle of the Overpass.

Binding arbitration at GM or Chrysler or a strike by Ford’s cranky members would fatally undercut King’s long-shot strategy to rebuild the union’s dues base with new members working down south for foreign-owned competitors. Either development also could ding the re-election prospects of the president whose intervention in Detroit effectively saved the UAW.

Better for union members slowly coming to terms with Detroit’s predicament today would be deals that promise richer profit-sharing, fresh investment and more jobs in existing plants, starting with GM’s idled assembly plant in Spring Hill, Tenn., and Ford’s Auto Alliance International operation on Flat Rock, to name two.

The challenge in the hours and days ahead will be for the union and company bargainers — particularly at post-bankruptcy Chrysler and GM — to close the deal, to demonstrate to politicians and investors, customers and themselves, that there really is a New Detroit.

Or they’ll take the blame.

True that. Which is why Marchionne’s little outburst doesn’t matter nearly as much as some think. Just as Bob King has taken Sergio’s rebuke on the chin, the UAW rank-and-file will accept whatever’s on the table. Even the appearance of confrontation with the only automakers willing to do business with the UAW will shatter King’s vision of transplant factory organizing and global alliances backed by friends in the White House. And he and everyone else who has believed his “21st Century UAW” rhetoric will be stuck in the nightmare of “Old Detroit”… forever.

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7 Comments on “The Sound And The Fury: Marchionne Letter Stirs Up Tensions, But Talks Continue...”


  • avatar
    OldandSlow

    So, Marchionne has let it be known that no contract agreement can be finalized with his presence at the table and that his time is very valuable. My question is does this man know how to delegate authority?

    My experience with micro-managers is they tend to cause one huge bottle neck in an organization.

    I know the rank and file UAW guys aren’t very cerebral, but Chrysler, Ford and GM together have a 43% market share in this country and many of their products are built in Mexico. In the past ten years, auto manufacturing jobs have grown at a faster pace in transplant states like Georgia, Alabama or Mississippi than they are in Michigan. In short, maybe a 1/3 of new vehicles sold in the US are assembled by the UAW.

    Most US car buyers won’t notice a strike at either of the Detroit 3. Pickup trucks on the other hand are a different story.

    • 0 avatar
      mikey

      @ OldandSlow..You know, that the rank and file UAW “aren’t very cerebral”…?

      Thats pretty deep, dude. Did you take a survey? Or maybe a mass I.Q test?

      Really…I know former UAW members that can hardly read. One dude owns three houses,and winters in Florida. Oh yeah, and a single mom that put three kids through university. The same girl that made herself rich buying, and selling, run down, high end real estate. She just loves over educated, pompus jerks living beyond thier means.

      Don’t ever judge a persons I.Q by the color of thier collar.

  • avatar
    jruhi4

    Although you’re right in that Marchionne isn’t the greatest delegator of authority, in this case the contract signing does legally require Marchionne’s signature and presence.

    A number of news outlets have reported that Marchionne canceled a meeting with German leader Angela Merkel after the Frankfurt Auto Show just to meet up with Bob King, only to have King himself stand him up and not answer Marchionne’s calls.

    No wonder Marchionne was pissed…

  • avatar
    Contrarian

    As the UAW waves bye-bye to the transplants… I called the letter:

    “Chrysler CEO Sergio Marchionne lets the air out of the UAWs tires. And pulls them off the rims.”

    1) UAW says it needs to have 1 transplant, soon, to survive.
    2) This incident makes that all the less likely.

  • avatar

    Meaning some things in this town never change.

    Forget it, Jake. It’s Motown.

  • avatar
    bomberpete

    Good one, Ronnie!

    Sergio is an excellent position to say the hell with the UAW. To a lesser extent, so is Ford. They can go longer without parts and assembly; that’s what all that cash on hand is for. GM? Well…..

  • avatar
    ciddyguy

    When I first began to read this post, my thought was, get too greedy now, and it could bite you in the ass later on when you really need it. Reading further down, I see where I was right.

    “Binding arbitration at GM or Chrysler or a strike by Ford’s cranky members would fatally undercut King’s long-shot strategy to rebuild the union’s dues base with new members working down south for foreign-owned competitors. Either development also could ding the re-election prospects of the president whose intervention in Detroit effectively saved the UAW.”

    It’s the above paragraph that essentially confirmed my suspicions and I would not hold it past King to bargain an agreement that favors the union, rather than GM, Ford or Chrysler or anyone else who signs on.

    I doubt the transplants will every sign on, I think they see the BS that is the auto union today and will simply ignore King and whoever else is head of the union in the future, if it survives.


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