Thursday, November 1

Chrysler Waits Obligitory 5-day Period Between 1st Date and Massive Layoffs

We're sure you've heard by now that Chrysler is showing its hand after avoiding the GM security promise during its latest contract talks. The now-private company let out that it may cut up to 10,000 jobs.

Not having the capacity or interest (or meager financial support) of official news outlets, we've waited for the story on the layoffs effects on Ford's still-pending UAW negotiations so we can poach it for our own article here.

From Reuters:

Jerry Tucker, a former UAW regional director who lobbied against the Chrysler and GM contracts, said Ford workers may feel a sense of betrayal to a point, but that would not necessarily keep them from approving a contract.

"Ford workers should look at this just the same, that they could ratify an agreement one day and see massive cutbacks the next day," Tucker said.

The analysists seem to be agreeing with Mr. Tucker. Consensus is that Chrysler's layoffs will make it exceedingly difficult for Ford to get the concessions it needs, because now the UAW looks emaciated. It's sitting in the middle of the negotiations with battered union syndrome.

While we wouldn't go as far as some and call this a "death knell" of the old school smokestack union, it is a blow to their status.

From the NY Times today:
Thursday’s additional job cuts could leave egg on the face of the auto unions. As Daimler prepared to sell Chrysler, Buzz Hargrove, the head of the Canadian Auto Workers Union, said that handing the company keys to a buyout firm would be the “worst-case” scenario.

“Our fear is private equity,” Mr. Hargrove told The Washington Post in March. “They are not out to build cars. It could mean throwing a lot of people out of work and then reselling” the company.”

Yet the unions were brought round to Cerberus as a new owner. In a statement announcing the Chrysler sale, the United Automobile Workers’ president, Ron Gettelfinger, said the deal “was in the best interests of our U.A.W. members, the Chrysler Group and Daimler.”

And elsewhere in the Times:

The U.A.W. did not comment. But one dissident union leader, Gregg Shotwell, said Chrysler’s actions threatened to create general distrust and divisiveness within the union.

Union leaders “certainly deserve to be distrusted because they misled people,” said Mr. Shotwell, whose group, Soldiers of Solidarity, campaigned against the versions of the U.A.W. contract that passed at Chrysler and G.M. “This has opened up people’s eyes.”

That idea has Wired News (yeah, we don't know either) saying Chrysler's private equity model will do away with unions entirely:

Cerberus [Chrysler's parent co.] has made noises about profit sharing with its workers, which has been Silicon Valley's preferred defense against unions. And even many UAW workers agree that smokestack unions everywhere are outmoded, inefficient and often corrupt. No doubt, profit sharing is the way of the future.

The big question in the short run is: what does Ford do now? They're arguably the farthest away from a recovery, and now they've got an expiring contract and a Union that's been striking for fun lately but still feels like it's against the wind.

And whose fault is it? Feel free to post your Detroit Diatribe in the comments.