Fiat CEO to Chrysler (UAW) Unions: Cut Costs or We Walk

[Broomstick]

In the US, union influence is usually given credit for the 40 hours week and a few other regulations. They weren't the whole of it, but yeah, in the US the unions did have an impact on labor laws. Whether or not that was true in other countries I don't know.

Here, the unions pushed for universal 40 hours weeks to lower competition from non-union workers willing to work longer hours when the US standard work week was 44 hours (8 hours Monday through Friday and a half day on Saturday).

[Glocksman]

The American employment market is ruthless and contributes no small amount of stress, especially to her and the circumstances it's put her through. I've ultimately come to the opinion that, really, it's a fundamental human right for people to be able to work under a Finnish-style employment law system, more fundamental than even the right to shelter that some have advocated.

The problem with the American labour market is not the ease with which workers can be fired: it's the fact that their society is designed in such a way that dismissal can absolutely devastate peoples' lives. I know people who have changed jobs many times but are still unreasonably happy, in large part because the social safety net keeps the demons away.

People can get new jobs, but it really helps to do so without feeling like they're in the Pit with the Pendulum in the meantime. Worker protection laws which make it extremely difficult to fire people can paradoxically be harmful to employee morale: one of the most annoying phenomena in the workplace is to interact with worthless employees who can't be fired.

Indeed.
The paradox for me is that while I could quit TJ Maxx and get a job doing the same thing (driving forklifts and other PIT's) making a bit more an hour than what I currently make, most of those jobs don't offer health benefits.

Considering the fact that I have both an artificial heart valve and a pacemaker, losing my insurance would practically be a death sentence because of my need for constant INR readings, pacemaker checks, and prescriptions for Coumadin.

If the US had a 'socialist' (channeling Rush Limbaugh*) health care system, I could look for a better paying non-union job without worrying about fucking dying or having a stroke before I found one.

As it is, healthcare coverage and the contractual provisions requiring 'just cause' before terminating an employee (Indiana is an 'at will' state WRT employee terminations) justify my being a union supporter (and UHC advocate) despite my otherwise conservative/libertarian outlook on some social issues.


*What's the difference between Rush Limbaugh and the Hindenburg?
One's a flaming Nazi gasbag and the other is a dirigible.

[Stuart Mackey]

In Australia, it was the unions who really helped bring about OH&S regulations. The employers associations fought them every step of the way. I know how damn useful (if at times annoying) they are.

I'm not sure how it's done in America or Canada.

How do you know the unions were responsible?

Like in NZ and the UK, the unions in Australia formed a political party got into power and changed the law. The current Aussie government is Labor, the previous NZ government was Labour and the current UK government is Labour and all of these parties have their origin in the unionised labour movement.

[bobalot]

In Australia, it was the unions who really helped bring about OH&S regulations. The employers associations fought them every step of the way. I know how damn useful (if at times annoying) they are.

I'm not sure how it's done in America or Canada.

How do you know the unions were responsible? In Canada, it is liberal political parties which are primarily responsible for passage of such laws. It could be argued that unions tend to support those parties, but it's a pretty big stretch to go from that to "unions are responsible".

In the US, would you say that unions are responsible for everything the Democratic Party has ever done, by virtue of the same proxy responsibility logic? I don't buy that.

In fact, unions spend most of their time lobbying for benefits which will affect their own members but either harm or do nothing for everyone else. Of all the thousands of union-paid political ads I've ever seen and heard in my entire lifetime, I don't recall even one which promoted labour protection for all workers, as opposed to just their own members.

I thought this thread died, sorry for the late response. As already pointed out before, in Australia the unions form the backbone of the Labor party which brought in these changes. OH&S, Workcover, Superannuation, equal pay for equal work, etc. were all union initiatives. They made up a major part of Labor policy platform in the 70's and 80's.

The Accord was an agreement between the Hawke Labor government and the unions. Unions agreed to cut back on strikes and restrict wage demands in order to curb inflation, in return for a "social" wage like Medicare, superannuation, income support etc. Under the Accord, Enterprise bargaining was brought into place, which provided a surge in workplace productivity which is only started to peter out in recent years.

[MKSheppard]

So..........in effect it's still outright thuggery, just dressed up in nice words.

"We'll cut back on breaking your kneecaps strikes in exchange for bribes bribes.

[bobalot]

What the fuck?

It's called negotiation. How else would OH&S, equal pay, etc. would have been introduced? Employers would have never introduced these practices. Multinationals fight tooth and nail against the introduction of basic worker protections in third world countries. They don't give two shits about their employees.

In the 1970's Aboriginal cattle hands were paid less because....they were aborigines. They got equal pay for equal work through strike action. I guess that must be thuggery. Perhaps in some Utopian fantasy land this injustice would have been addressed by asking their employers nicely.

[bobalot]

Correction: It was 1965 that Aborigines got equal pay, not the 1970's. It was the North Australian Worker's Union that won equal pay for Aboriginal cattle hands.

[Darth Wong]

It's called negotiation.

So? Blackmail is also a form of negotiation.

How else would OH&S, equal pay, etc. would have been introduced? Employers would have never introduced these practices.

Of course not, but liberal political parties could, and have done so in the past. The most important labour rights development in human history was the abolition of slavery, and that was brought about solely through political reform. And how about universal health care? Pushed through in many countries, including my own, solely through political means, without union bullying.

[Broomstick]

The most important labour rights development in human history was the abolition of slavery, and that was brought about solely through political reform.

Although the US Civil War was not just about slavery, it was what ended it in the US. Here, it took widescale bloodshed to end it, not "political reform"

[Prannon]

On a slightly different note, has there been any more revealing news or chatter about the Chrysler/Fiat merger deal? I'm rather anxious to know if that will succeed or if we'll be having a bankrupt Chrysler in the near future. Given the "damn the torpedoes" mindset of Chrysler's leadership of late, and the general impression of imminent failure, I doubt the company would really have any recourse to bankruptcy if the merger failed.

[Darth Wong]

The most important labour rights development in human history was the abolition of slavery, and that was brought about solely through political reform.

Although the US Civil War was not just about slavery, it was what ended it in the US. Here, it took widescale bloodshed to end it, not "political reform"

Actually, the abolitionist movement was entirely political in the civilized world. It was just the Southern US where it required bloodshed.

[Solauren]

On a slightly different note, has there been any more revealing news or chatter about the Chrysler/Fiat merger deal? I'm rather anxious to know if that will succeed or if we'll be having a bankrupt Chrysler in the near future. Given the "damn the torpedoes" mindset of Chrysler's leadership of late, and the general impression of imminent failure, I doubt the company would really have any recourse to bankruptcy if the merger failed.

Not that specifically, but more in general.

(Please see my comment below)

Union rejects Chrysler Canada demand ahead of talks

TORONTO (Reuters) - Just hours before restarting concession talks with Chrysler on Monday, the Canadian Auto Workers union said it would not agree to cut its members' wages and benefits by the C$19 ($15.32) an hour that the company and the Canadian government have demanded.

The concession talks were set to resume on Monday, 10 days ahead of a deadline set by the Canadian and U.S. governments for Chrysler to present an acceptable restructuring plan to qualify for billions of dollars in government aid. Formal CAW-Chrysler negotiations have not been held since the beginning of April.

CAW President Ken Lewenza told reporter that the governments of Canada and the province of Ontario had contacted the union over the weekend to say a deal needed to be done "sooner than later".

However, Lewenza lashed out at Canadian Industry Minister Tony Clement, who last week joined Chrysler in saying that the company would not be viable with out a reduction of C$19 an hour, or over 20 percent, in labor costs.

"That's just not feasible," Lewenza told reporters. "We are not dealing with a unilateral number."

Lewenza refused to speculate about the outcome of the talks.

The union said its talks with Chrysler had been suspended in early April so that Chrysler, which like other automakers has seen it sales sideswiped by the global economic crisis, could focus on the details of a proposed alliance with Fiat SpA .

A spokeswoman for Chrysler, which employs around 9,400 people in Canada, about 8,000 of whom are CAW members, said the company looked forward to the talks resuming, but that it had no other comment.

You know what?

I have heard NOTHING about a CAW vote to say if the cuts were acceptable to the Union membership. Apparently the GM workers had no problems.

Quite frankly, I'm beginning to re-evaluate my position about not destroying the CAW/UAW.

It sounds to me like the union leadership is screwing it's own membership over here.

If Chrysler goes bankrupt, they are screwing there membership out of 100% of their wages, not 20%.

Quite frankly, I'd sooner take a 20% pay cut, then a 100% paycut.

The CAW leadership needs a serious wake-up call. And I mean serious.

And if the membership can't see that, well, fuck em

[aerius]

I saw the CAW head jackass getting interviewed on the news today. He outright stated that a $19 cut was completely out of the question and that any salary cuts were "out of the question". When asked what will happen if they don't make the cuts and Chrysler goes bankrupt, he said something along the lines of "that's not negotiation, that's an absurd blackmail demand and we're not going to stand for it. They can't do that, I don't see the point of negotiations but we have to do it anyway".

If they want to be that way, fuck'em. Let'em go bankrupt and have their pensions liquidated by the creditors, let's see how they like that.

[Prannon]

Now I'm noticing something else. Is it known how unions work internally? Everyone here seems to assume that the union heads are arbitrarily deciding not to negotiate pay just to be dicks, rather than them having a reason behind their saying so.

I mean, politicians sometimes do stupid things. Case in point, Governor Perry of Texas pandering to a crowd with secessionist rhetoric, only it's reasonable to assume that he doesn't actually think that would work and is only pandering to his core supporters.

Would it be reasonable to assume that the CAW leadership is under similar pressure somewhere? Or do they feel an obligation to hang on to all the concessions they've won from the auto companies by the skin of their teeth? Or are they really just being dicks with no concern for the future of their workers (ie the union leaders have their own version of a golden parachute which protects them from personal harm)?

[Temjin]

I saw the CAW head jackass getting interviewed on the news today. He outright stated that a $19 cut was completely out of the question and that any salary cuts were "out of the question". When asked what will happen if they don't make the cuts and Chrysler goes bankrupt, he said something along the lines of "that's not negotiation, that's an absurd blackmail demand and we're not going to stand for it. They can't do that, I don't see the point of negotiations but we have to do it anyway".

If they want to be that way, fuck'em. Let'em go bankrupt and have their pensions liquidated by the creditors, let's see how they like that.

How fucking divorced from reality do you have to be to see the sentence "We need to make paycuts or else we'll go bankrupt" as fucking blackmail?

I don't mind unions most of the time. I think they serve some useful purposes. But damn do they enjoy shooting themselves in the foot sometimes.

[Edi]

In Finland the paper industry is closing down factories left, right and center and the Paper Union and some other organizations are whining about how it's being unfair. Factories are being moved elsewhere and the capacity being eliminated here will be up for grabs by someone else who can use it more profitably. The Paper Union here has had the exact same attitude as the CAW all down the years, insisting on massive pay increases every round of labor negotiations, cutting costs never an option and so forth and now they're reaping the rewards.

There was a big hue and cry in Canada a few years back when the Finnish paper companies like UPM-Kymmene and Metso were closing down their Canadian operations, and it was due to costs then as well. CAW is going to be in for a really rude surprise when reality finally asserts itself. They can either take a paycut or lose everything, but the denial seems to be strong.

[Broomstick]

When asked what will happen if they don't make the cuts and Chrysler goes bankrupt, he said something along the lines of "that's not negotiation, that's an absurd blackmail demand and we're not going to stand for it. They can't do that, I don't see the point of negotiations but we have to do it anyway".

Chrysler can't do what? Go bankrupt? They sure as shit can.

Sounds like this guy is living in never-neverland convinced that this is all somehow a stunt by Chrysler to stick it to the line worker. Hey, I would have taken a $19/hour paycut if I could have kept my corporate job and its benefits.... but I didn't have that choice. If the union gets that stubborn all the CAW will be inn the unemployment line and Mr. Union Dude will also be out of a job.

[bobalot]

How else would OH&S, equal pay, etc. would have been introduced? Employers would have never introduced these practices.

Of course not, but liberal political parties could, and have done so in the past. The most important labour rights development in human history was the abolition of slavery, and that was brought about solely through political reform. And how about universal health care? Pushed through in many countries, including my own, solely through political means, without union bullying.

There isn't a 'Liberal' party in Australia (in the Canadian or American sense, the conservative party is called the 'Liberal Party'). All these reforms were spearheaded by the Unions and the Labor party (which was created by the unions). Equal pay for Aborigines and Women were trade union initiatives. OH&S, Workcover, anti-discrimination laws in the workplace, Superannuation, etc.

The Democrats of the New Deal era depended on the trade unions for support (though not as much as the Labor parties of Australia and Britain I imagine). I can't think of a country that didn't have these reforms pushed into place without the support of trade unions.

Alongside talking you need the option of strikes. If you don't have the power to annoy people, people aren't going to give a shit what you think. Aborigines and women were discriminated against for decades. Liberal politicians didn't do shit. It took action and the threat of strikes to change things.

I'm not saying that Unions can't abuse their power or act thuggishly. I think they have made some pretty good contributions to society and are useful to have around.

[Solauren]

Now I'm noticing something else. Is it known how unions work internally? Everyone here seems to assume that the union heads are arbitrarily deciding not to negotiate pay just to be dicks, rather than them having a reason behind their saying so.

Union leadership works for the Union, not the companies the union has membership in. Kinda like an employeement agency. They are often 'elected positions'

They try to get all they can for the membership, because if they don't, next election cycle, they are tossed out on their ass.

I mean, politicians sometimes do stupid things. Case in point, Governor Perry of Texas pandering to a crowd with secessionist rhetoric, only it's reasonable to assume that he doesn't actually think that would work and is only pandering to his core supporters.

This is essentially what large union leadership is. Polititions.

Would it be reasonable to assume that the CAW leadership is under similar pressure somewhere?

Yes, it's called motivated self-interest. As in not pissing off enough of the membership to get voted out.

Or do they feel an obligation to hang on to all the concessions they've won from the auto companies by the skin of their teeth? Or are they really just being dicks with no concern for the future of their workers (ie the union leaders have their own version of a golden parachute which protects them from personal harm)?

Yeah, Union leaders are the ones with the best retirement benefit packages out of the union membership.

[Darth Wong]

Alongside talking you need the option of strikes. If you don't have the power to annoy people, people aren't going to give a shit what you think. Aborigines and women were discriminated against for decades. Liberal politicians didn't do shit. It took action and the threat of strikes to change things.

Since when did women go on strike to get rights? They agitated politically, and eventually got the right to vote among other things. Similarly, slaves did not strike to get rights: if they did so they would have been tortured and killed. While the enforcement of anti-slavery laws ended up becoming violent, the passage of those laws was a political process.

I think you're confusing cause and effect here. Workers had shit conditions for centuries and those conditions did not improve until social and political conditions changed too. Trade unions sprung up not as a cause, but as an effect. There was a HUGE leftist liberal movement in the 19th century, right around the time the labour unions began to grow in power.

[aerius]

I don't see this working out well. You have one of the worst asshole unions around and they're going to have majority ownership of the company. Can you say "run it into the ground"?

Marketwatch link

UAW to own 55% of Chrysler under restructuring deal: WSJ
By Myra P. Saefong, MarketWatch
Last update: 9:37 p.m. EDT April 27, 2009
Comments: 56
TOKYO (MarketWatch) -- Under an agreement struck between the United Auto Workers union and Chrysler LLC, the union would eventually own 55% of the auto maker's stock once the company is restructured, according to a report late Monday from The Wall Street Journal.

The summary of the agreement also shows that Fiat SpA will "eventually" own 35% of Chrysler, and the U.S. government and Chrysler's secured lenders will own another 10% of the company following its reorganization, the report said.

The UAW union reached tentative deals with Chrysler and its potential partner Fiat Group on Sunday, with the union giving up key concessions that will allow Chrysler to avoid bankruptcy.

[bilateralrope]

Is is just me, or does a union owning part of the company look like a conflict of interest ?

On the one hand, they are supposed to be on the workers side. On the other hand, treating the workers badly can cut costs, thus increasing the value of the shares they own.

[Patrick Degan]

Worker-owned companies usually take the form of Employee Stock Ownership Plans, in which the employees are the direct shareholders. The stock is not publicly traded but held in a trust set up under the plan, and the value of the company portfolio is assessed annually by an independent auditor. Basically, a private company under collective ownership. Nypro, a Massachussets-based plastics firm and a rather profitable one, is the sixth largest such entity in the United States and three years ago extended ownership rights to its foreign employees in seventeen countries.

Whether such an arrangement could work with Chrysler in its present state is, I would say, dubious. Chrysler's debt is crushing at this point and it's market performance is slipping fast. The value of the stock is far more likely to crash before an ESOP could ever be set up.

[Solauren]

Well, at least if Chrysler crashes and burns, the UAW has no one to blame but themselves now.

[Enigma]

Well, at least if Chrysler crashes and burns, the UAW has no one to blame but themselves now.

Wrong. They'll still be blaming everyone and everything but themselves. Hell, I bet if Chrysler went under, they'd blame the weather, the guy crossing the street just as Chrysler announces their closure, the birds, everything except themselves.

Then the UAW will continue until another company goes under and they'll still keep up with the BS.