Magna Prepares to Buy Chrysler
When Cerberus liberated Chrysler from its German captors, we speculated on the role parts maker Magna would play in the ailing automaker's future. At the time, we were looking for the three-headed canine to perform a quick strip and flip, off-loading a big ass chunk of Chrysler's production onto the cash-rich Canadians. Perhaps we spoke too soon. Bloomberg reports that Magna has reversed decades of anti-union efforts and signed a "Framework of Fairness" with the Canadian Auto Workers Union (CAW). Under the terms of the agreement, the CAW agrees to a no-strike clause, in favor of independent arbitration.Today's Globe and Mail prints a joint statement by Magna's Frank Stronach and the CAW's Buzz Hargrove claiming that they've put away their differences "for the sake of the industry." Apparently. "economic studies have suggested that companies that pair union representation with extensive mechanisms for worker involvement and participation attain the best possible combination of high productivity and high morale." Who knew? A more likely explanation: at a stroke, the deal removes Chrysler's United Auto Workers members' objections to Magna's purchase of Chrysler production facilities, if not the entire company. Rock and roll!
More by Robert Farago
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At first glance the CAW Magna deal looked a little strange. Buzz of course would jump at it[more members more money] A bunch of us talking last night couldn't figure what was in it for Frank Stronach. You just might be on to something R.F. Hmmm ?
Brother Frank has been a cagey operator in the parts and OEM supply sphere for longer than I've been in the business. Hell, he even attempted to get his pretty daughter elected Prime Minister, or at least Governor-General. I wouldn't bet against him in a table stakes game with Cerberus, either. Remember, even though the PC's are currently running the country, the Canadians have a way of shoveling public $$$ into the betterment of the body politic- something America quit doing in about 1980.
Cool, let's sell the Canadians the whole Chrysler kit and kaboodle. First, they can now have their own car company. Perhaps it will stop a little whining, but definitely it will change their attitudes about car companies. Second, Frank is a boss that deserves a union. The bottom line will be a weakening of unions, the world socialist movement, and hate towards the US. On second thought, scratch the last part as they will all say it was a conspiracy to hurt the value of the Looney.