UAW To Own Chrysler

by Robert Farago

Published: April 28th, 2009

According to Automotive News [sub], the United Auto Workers (UAW) agreement with Chrysler/Fiat would deliver unto the union a 55 percent share of the reborn Italian – American automaker. As in the proposed (but doomed) GM bondholder offer, ChryCo union workers will forego a multi-billion dollar payment into their Voluntary Employment Beneficiary Association (VEBA) health care fund in exchange for the equity stake. In Chrysler’s case, $6 billion buys them controlling interest in Chrysler. That’s all kind of nuts on all kinds of levels. And as we’re in tail wagging the dog territory . . .

“The UAW agreed to allow Chrysler to hire as many so-called Tier 2 workers as the company can until 2015, the source said. Those workers start at $14 an hour (versus $28 an hour for veteran workers) and receive fewer benefits. The number had been capped at 20 percent of the work force. Under the existing contract, plants can have many more classifications . . . Other concessions include a reduction of job classifications. Chrysler plants will operate with just two classifications of production workers and two classifications of skilled trades.

So what was bad for the union is now good for the union, as the union controls the union’s pay and conditions. Welcome to the world according to American Leyland.

Robert Farago

More by Robert Farago

Comments

Join the conversation

4 of 81 comments

Byobassoon on Apr 29, 2009

BDB......"But I don't think of you" The reality is that the UAW, among others, are responsible for the disaster that the US car industry is in. Their pay and benefits made the US auto industry uncompetitive...period. They also had dozens of strikes over the past 30 or so years(I say 30 years because the cat has been out of the bag on the quality of the American auto since then). Did they once strike to demand that the management build better cars? I actually don't know but I doubt it. A quality product is the closest thing to a cradle to grave guarantee that exists. OBVIOUSLY. Last point: Over the past 10-15 years the UAW has seen falling membership, pay and benefits. If they cant do their specialty well, how well are they going to run something that they have very little expertise in? This said, how could someone believe that the UAW is qualified to run a successful car company?

Like Reply
Vento97 on Apr 29, 2009
kowsnofskia : The UAW would have a controlling share? Why in the hell does anyone think this is a good idea? The UAW should be told to go to hell, not be given controlling shares in companies they helped destroy. If the UAW wants to spend all that money for first-class seats on the Titanic, who am I to refuse their request?...:) Think about it - If (when) Chrysler/Fiat goes down, the UAW will go down with it. Problem solved...

Like Reply
Geeber on Apr 29, 2009
no_slushbox: Her books did have a pretty good marketing edge: self affirmation for narcissists. “I do everything, but nobody gives me any credit, nobody else does anything, I’m going to quit, that will show them. Screw you guys, I’m going home to my imaginary island!” In which case, she did nothing different from authors of books promoting every other ideology, economic and otherwise. After all, what do most union activists say? "The worker does everything, but nobody gives him credit, etc., etc." Except, of course, that the union activists expect someone else to pay for their imaginary island. At least Ayn Rand didn't expect anyone to do that. I don't know how many times, on other message boards, I've read posts from UAW supporters saying that the UAW "made" the domestic auto industry. For feminists and minority activists, simply substitute "women" or a "particular race" for "men" and you've got the same basic idea (or screed).

Like Reply
GS650G on Apr 29, 2009

I guess high salaries, free health care, long golden retirement packages, and outrageous benefits including car discounts for all those years was not enough. If you only looked at their side you'd think that they were unpaid volunteers or something.

Like Reply