Chrysler Suicide Watch 27: What's Next

Robert Farago
by Robert Farago

How in the world did the United Auto Workers (UAW) boss Ron Gettelfinger think he could get his Chrysler members to ratify their proposed contract without providing job guarantees? Did he seriously believe a $3k signing bonus would convince his otherwise carrot-less union brothers and sisters to surrender their right to graduate into cushy “non core” jobs? Or was Gettelfinger blindsided by his own ego; figuring he could yell “roll over” and “play dead” at 45k well-paid autoworkers and make it so? Either way, the question must be asked: what the Hell is going on?

First, the latest point in our connect-the-dots sequence: a so-called “secret handshake” deal between the UAW and Chrysler. Reuters reports that UAW VP General Holiefield told Local leaders he made an unannounced pact with Chrysler to keep certain U.S. plants open if members ratify the new contract. Assuming Chrysler workers will believe Holiefield– a stretch given the rancor surrounding the po-faced contract– it’s a clever play. But is it true?

If Chrysler owner Cerberus offered their UAW members job guarantees, surely BOTH sides would want them in writing to ensure the new contract’s ratification. There are two possible reasons why the union would hide assurances of job security. Either the UAW knows that this alleged job security is highly selective (i.e. they realize that Chrysler’s about to shut plenty o’ plants) and therefore divisive, or there wasn’t any “secret” deal. It’s just a desperate UAW officer blowing smoke up his members’ collective asses.

No matter how you look at it, the UAW leadership has rolled onto its back doggie style, their members aren’t buying the new deal and the union brass are growing increasingly desperate. To wit: not only did the International approve the contract by voice vote, but they aren’t reporting ANY member voting totals. The Locals are playing fast and loose with the numbers as well. The Detroit News says that three quarters of their yes/no stats arrive as percentages, rather than precise numbers.

Could the UAW cheat their way to ratification? Sure. And if the subterfuge is discovered, there will be Hell to pay– within the UAW, relative to Chrysler and, lest we forget, over at Ford. And what will happen if the rank and file reject the contract? The key to this conundrum, indeed, the explanation for this incipient chaos, lies within the UAW’s six-hour strike with Chrysler.

It’s critical to note that the Chrysler strikette represented a split within the union, rather than a united push for more concessions. After the UAW walked out, they did not return to the bargaining table; they simply signaled Chrysler that they were ready to sign. Lead negotiator Bill Parker’s immediate and public opposition to the deal is proof positive that the UAW was of two minds. And the bit that said this is as good as it’s ever gonna get won.

Think of it this way: Union boss Ron Gettelfinger understands that Chrysler is a company staring down the barrel of Chapter 11. He also knows Cerberus stands ready, willing and able to let its 45k union employees go on strike– and break it. He must have figured it’s better to capitulate now and make it look like tough negotiation, rather than face Cerberus’ nuclear winter. And he may have been emboldened by his success at GM.

But there’s one thing Gettelfinger didn’t/doesn’t understand: his members’ ignorance and militancy.

The average Chrysler worker doesn't believe that his or her employer is about to go under. They don't appreciate the fact that Chrysler’s lack of a foreign sales safety net makes it especially vulnerable. They don't understand that one of the world’s richest private equity firms will hang the company out to dry in a New York minute if they think it’s an irredeemable money pit. All they know is that someone’s getting screwed and it’s us. As usual.

Gettelfinger’s mob forgot to sell union members on the idea that Cerberus holds all the cards. Saying that, how could they? Big Ron couldn’t risk calling a “real” strike to get his members in line– because they would have lost. And he couldn’t tell the truth about his position, because he would have been considered weak, and the members might not have bought it anyway. But the truth is neither Gettelfinger nor his members can avoid the truth.

If Chrysler workers are allowed to reject the contract, the UAW goes back to the bargaining table. Chances are nothing much will change. The leadership will re-present virtually the same contract and hope the members have “got it out of their system” and approve the deal (a la National Steel in the early ‘90’s). If Gettelfinger’s regime can’t withstand the fallout and/or gets caught cheating, the new leadership will call a strike. And lose.

[Interview with Greg Shotwell of the Soldiers of Solidarity below]

Robert Farago
Robert Farago

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  • ZoomZoom ZoomZoom on Oct 26, 2007

    Sure it would. But any good investor is prepared to take a sooner but smaller loss in order to prevent a future but bigger loss.

  • LLC LLC on Oct 26, 2007

    I like that philosophy. I will recommend it to all my friends in the UAW.

  • Pau65792686 I think there is a need for more sedans. Some people would rather drive a car over SUV’s or CUV’s. If Honda and Toyota can do it why not American brands. We need more affordable sedans.
  • Tassos Obsolete relic is NOT a used car.It might have attracted some buyers in ITS DAY, 1985, 40 years ago, but NOT today, unless you are a damned fool.
  • Stan Reither Jr. Part throttle efficiency was mentioned earlier in a postThis type of reciprocating engine opens the door to achieve(slightly) variable stroke which would provide variable mechanical compression ratio adjustments for high vacuum (light load) or boost(power) conditions IMO
  • Joe65688619 Keep in mind some of these suppliers are not just supplying parts, but assembled components (easy example is transmissions). But there are far more, and the more they are electronically connected and integrated with rest of the platform the more complex to design, engineer, and manufacture. Most contract manufacturers don't make a lot of money in the design and engineering space because their customers to that. Commodity components can be sourced anywhere, but there are only a handful of contract manufacturers (usually diversified companies that build all kinds of stuff for other brands) can engineer and build the more complex components, especially with electronics. Every single new car I've purchased in the last few years has had some sort of electronic component issue: Infinti (battery drain caused by software bug and poorly grounded wires), Acura (radio hiss, pops, burps, dash and infotainment screens occasionally throw errors and the ignition must be killed to reboot them, voice nav, whether using the car's system or CarPlay can't seem to make up its mind as to which speakers to use and how loud, even using the same app on the same trip - I almost jumped in my seat once), GMC drivetrain EMF causing a whine in the speakers that even when "off" that phased with engine RPM), Nissan (didn't have issues until 120K miles, but occassionally blew fuses for interior components - likely not a manufacturing defect other than a short developed somewhere, but on a high-mileage car that was mechanically sound was too expensive to fix (a lot of trial and error and tracing connections = labor costs). What I suspect will happen is that only the largest commodity suppliers that can really leverage their supply chain will remain, and for the more complex components (think bumper assemblies or the electronics for them supporting all kinds of sensors) will likley consolidate to a handful of manufacturers who may eventually specialize in what they produce. This is part of the reason why seemingly minor crashes cost so much - an auto brand does nst have the parts on hand to replace an integrated sensor , nor the expertice as they never built them, but bought them). And their suppliers, in attempt to cut costs, build them in way that is cheap to manufacture (not necessarily poorly bulit) but difficult to replace without swapping entire assemblies or units).I've love to see an article on repair costs and how those are impacting insurance rates. You almost need gap insurance now because of how quickly cars depreciate yet remain expensive to fix (orders more to originally build, in some cases). No way I would buy a CyberTruck - don't want one, but if I did, this would stop me. And it's not just EVs.
  • Joe65688619 I agree there should be more sedans, but recognize the trend. There's still a market for performance oriented-drivers. IMHO a low budget sedan will always be outsold by a low budget SUV. But a sports sedan, or a well executed mid-level sedan (the Accord and Camry) work. Smaller market for large sedans except I think for an older population. What I'm hoping to see is some consolidation across brands - the TLX for example is not selling well, but if it was offered only in the up-level configurations it would not be competing with it's Honda sibling. I know that makes the market smaller and niche, but that was the original purpose of the "luxury" brands - badge-engineering an existing platform at a relatively lower cost than a different car and sell it with a higher margin for buyers willing and able to pay for them. Also creates some "brand cachet." But smart buyers know that simple badging and slightly better interiors are usually not worth the cost. Put the innovative tech in the higher-end brands first, differentiate they drivetrain so it's "better" (the RDX sells well for Acura, same motor and tranmission, added turbo which makes a notable difference compared to the CRV). The sedan in many Western European countries is the "family car" as opposed to micro and compact crossovers (which still sell big, but can usually seat no more than a compact sedan).