Marchionne: Don't Hold Your Breath For UAW Board Seats

From the “sidelines” of the MBS conference in Traverse City Michigan, Wards Auto reports that Fiat-Chrysler CEO Sergio Marchionne is not keen on giving the UAW a board seat. UAW President Bob King has been pushing for VW Works Council-style representation on the Chrysler board, but as Marchionne explains

The best intervention that the unions or labor or organized labor can bring to the party is a support for the choice of the right leader to lead the organization… I understand Bob. I understand what he’s saying (but) we have to be very careful that we don’t exaggerate the value of co-determination

Co-determination gives rise to two decision-making bodies. The executive board makes decisions. And the unions sit on supervisory boards, one of which is the choice of the CEO. The most fundamental and difficult decision that a board makes is the choice of a CEO. If you make the right choice, issues with labor unions will not arise

Considering the UAW VEBA trust fund is the single minority shareholder in his company, Marchionne is admirably and typically frank in dismissing his union boss’s ambition. And since Marchionne doesn’t intend on retiring before 2015, his answer might as well have been “why do you need a board seat, when you have me?” But there’s another aspect to his argument that reveals that Bob King might have already doomed the union’s chances at a board seat.

Ever since Bob King took over from Ron Gettelfinger, the new UAW president has sought to revive his union’s sense of purpose in hopes of combatting declining membership and the reputational hit caused by the bankruptcy of two of its biggest “partners.” That general effort has taken three forms:

1. Declaring a “21st Century UAW,” in “partnership” with the Detroit automakers
2. Aggressively pursuing organizing drives among the foreign owned “transplant” factories
3. Building international union solidarity by creating linkages with foreign unions

While working on part three, King even went to Italy to meet with the restive unions that have plagued Marchionne… and this seems to have left a lingering suspicion in the back of Marchionne’s mind. He tells Wards

For multinational companies, it becomes almost impossible to find the right mix of labor representation to effectively stand in for the labor force across the group.

Fiat apparently thinks that the UAW, under an internationalist crusader like King, would try to organize its low-cost workforce in Mexico, Brazil, Poland and Turkey. What’s particularly interesting about this is that Volkswagen, which King seeks to emulate, suffers from no such problem: the boys from IG Metall have hardly come out in support of UAW organizing efforts in Chattanooga, and seem to have no problems with low-cost Chinese manufacturing. One can only assume King’s international exploits, threats of human rights violation accusations, and ruthless hypocrisy have convinced Marchionne that he can’t be trusted.

Too bad. Now King will have to use all of his political capital securing benefits for his workers instead of chasing ego-gratifying distraction.