Just after the UAW came to a final agreement with Chrysler for a four-year labor contract, the U.S. car company said it would fire 10,000 people, many of them hourly workers. The move had to make UAW officials feel betrayed. They had pushed for ratification of the new deal.
The ultimate victim of Chrysler's bold move, however, may be Ford (NYSE: F). Ford does not have a deal with the UAW, and the union may feel that it needs a contract with the No. 2 U.S. car company to guarantee more jobs and avoid mass layoffs. Ford's problems are that it has had 13 months of falling domestic sales, and has not been able to cut as much out of its supplier costs as it had anticipated.
The UAW may not care about Ford's problems. As one expert observer told Reuters, "Ford workers should look at this just the same, that they could ratify an agreement one day and see massive cutbacks the next day." Workers are already speaking up about the Chrysler move. "There was no job security in the Chrysler-UAW contract," said Gregg Shotwell, a UAW worker at GM.
Ford needs a good deal with the UAW; its sales numbers are just too awful. The UAW may make Ford promise to keep open plants that the car company would rather shut and keep workers that it would rather lay off. With Ford's revenue problems and weak balance sheet, it finds itself in an impossible position.
It's almost like Chrysler did this on purpose.
Douglas A. McIntyre is an editor at 247wallst.com
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Reader Comments (Page 1 of 1)
11-02-2007 @ 11:16AM
William Ward Jr said...
It boils down to pure economics sadly enough, if companies are losing money there is no job security.
11-02-2007 @ 11:23AM
William Ward Jr said...
We have a real chance here with some traditional economics happening. The weak dollar is causing exports to go up, so while sales dcomestically are slow international sales increase. CNBC yesterday estimated that with the housing and other slow sectors slowing economic growth by 1 % GDP,we gained 1% in international sales, exports.This very factor has kept us out of recession, one of the few good points about the new global economy.