Reports have surfaced in London that Italian automaker Fiat is ready to walk away from the Chrysler deal. The bone of contention is high labor costs. The Italian firm has given the U.S. auto firm and Canadian and American labor unions until the end of the month to "significantly reduce labor costs." This revelation was made in an interview of Fiat's CEO Sergio Marchionne in the Canadian newspaper the Globe and Mail. Fiat wants Chrysler to lower the labor costs to Japanese and German plants levels. The problem facing Chrysler is that the deal with Fiat is its last chance to stay out of bankruptcy. With Fiat ready to walk away from the deal, the North American unions had better agree to the demands or face some job losses. Let's not forget that Chrysler was given 30 days to complete the merger with Fiat or the American firm would be cut off from the government funding it is currently existing on.
Marchionne has one major thing working in his favor -- time. As the end of April looms, I have a feeling that the unions will understand their members face unemployment and may give in to Fiat's demands. We all know that unions can be stubborn, but I have a feeling that the possibility of lost jobs will outweigh the possibility of less pay.
No matter the outcome, one thing is certain: this is not the time for the labor unions to try and make a stand. If they do, we will see Chrysler forced under. I have a feeling that Marchionne will not back down as he is in the position of power here -- would you fold in poker if you held a royal straight flush? I think not. It would be best for the unions to fold and live to play another day rather than face losing it all.
What Happened When Alex Kenjeev Paid His Student Loan in Cash
Facebook's IPO Debacle, Day 3: Un-Friended and Dis-Liked on Wall…


Reader Comments (Page 4 of 4)
4-15-2009 @ 2:55PM
dan said...
Adam Smith: “What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” If you don't believe in democratic unions and you think corporations will pay a living wage, when they have more rights then you and are undermining our democracy, then I have a bridge for you to buy for a dollar. You see you have bought the supply, demand kool aid, that has no allegiance to the democracy and the middle class in Amercia , resulting in a world government governed by multination corpotations.
4-15-2009 @ 3:02PM
Tony said...
I hear everything on this blog but what the UAW is doing to save their jobs. Other than passing a law that all cars sold in the U.S. must be UAW made, or give us more loans (bail out) I see nothing in your posts but the same UAW rants. You want to keep your job? Get rid of Gettelfinger and get to the bargaining table.
4-15-2009 @ 3:05PM
Jim said...
The UAW as well as all labor unions were great 60 years ago, Now they just linger on in businesses lile a leech, sucking the life blood out of anything and anyone they touch, Its time for them to go away,into the grave with Dave Beck.
4-15-2009 @ 3:08PM
pulp2bgone said...
Oz...starting teachers in my state average about $25K to start. That's patently absurd. Some UAW person w/ essentially no education can start at double that? C'mon...where's the equity there? I love sports, too, but a college football coach in my state makes $3,000,000 total. That's even more obnoxious. At least the f-ball team makes $$ for the university so the coaching salary can be "justified"...UAW has brought the Big 3 to their knees
4-15-2009 @ 3:13PM
dan said...
What we are seeing is the end result of supply side economics which started in 1981 by Reagan and supported by Greenspan and the Harvard, Yale, Chicago School of Economics, cronies of the multinational corporations and the 1% who own 33% of the wealth, who got the benefit of the tax breaks. Another of the economists who spout the supply side is Kudlow on cnbc and his buddies Laffer and the other corporate paid economists, spouting supply side, free market, junk economics, which even Greenspan is admitting has been a failure. To prove it, in the 40's and 50s when unions were at their height,, and tax rates were at 70 to 90% on the wealthy, we had a GDP of 4%, and since the 80's it dropped to 3%. Lower taxes on the wealthy do not produce more wealth to the nation, period. When unions were in power corporations had to compete for labor; now labor competes with China and Mexico’s labor, after corporations started moving offshore from tax incentives they bought through the lobbyists on K street to influence our elected officials.
4-15-2009 @ 3:20PM
Tony said...
All this rhetoric is fine, but what do we do to save our auto industry? A lot of people (me included) feel feeding them money (a la the Post Office) is not the answer. What do we do to get our auto industry churning again? Obivous answer, sell more cars. But what millions out of work how can we do that? The imports are getting cheaper on the strength of the dollar versus the yen.
4-15-2009 @ 3:53PM
Evelyn said...
Brudele12.....people like you are the reason the american auto makers are going into bankruptcy.
As soon as Chrysler goes broke, and the remaining auto makers finally see the light and reorganize, your job will be history, and so will you.
4-15-2009 @ 4:00PM
john perry said...
Chrysler will not fail! BKO, baby killer obama, owes them to much. He will not tolerate one union member losing his or her job. He and the democrat party are building a base of losers at the expense of our American culture and lifestyle. I truly hope that I am wrong.
4-15-2009 @ 4:07PM
kelly said...
Well, how much do you think people should be paid? Or are all of you union haters think everyone should just be glad to have a job, even if it sucks big time ass? Everyone of you on this blog who goes on and on about the union either work for a big corporation (they dearly would love to see EVERY union in this country busted) or you are just plain stupid. There is always strength in numbers, and you have more of a voice with a union than without. Do you honestly think the government gives a tinker's damn about the working class? Look at the bailouts these last 6 months. That should give you an indication where we (working class) ranks. Everyone wants to blame the union for the automaker's financial woe's. I guess the financial crisis at AIG, Citibank, et.al and etc were caused by the reckless greed of union workers.
Keep fighting UAW, you are going to go down anyway unfortunately. Don't give up! If you fall, then let all fall.
SOLIDARITY
4-15-2009 @ 4:07PM
oz said...
pulp2bgone ........o your talking about starting out UAW workers hire in at 14 a hour with no PENSION AND VERY LITTLE HEALTH CARE
4-15-2009 @ 4:10PM
Lvndadream said...
Uemployed
Auto
Workers
4-15-2009 @ 4:16PM
oz said...
i hear i lot of people in here bitching i dont want my tax money going to help save autos.well why do you not bitch about all the state and government retirees that only work 20 years and get full pensions and health care that is far better than auto workers.ITS TAX PAYERS MONEY THAT PAYS FOR ALL THESE PEOPLE.WHY NOT BITCH ABOUT THAT.O YEA BY THE WAY THOSE GOVERNMENT PEOPLE VOTE THEMSELFS PAY RAISES WHILE THE COUNTRY GOES DOWN IN FLAMES. THINK ABOUT THAT .
4-15-2009 @ 4:18PM
Tony said...
If you want to see why Chrysler is going to fail read a few of the blogs above. "Solidarity" "Let's all fail together." When and if Chrysler and GM fails then the blogs will read, "we didn't see it coming" I thought they were kidding" You can't eat solidarity
4-16-2009 @ 6:15AM
papasnowbird said...
Hey Duke, aren't you living the American Dream.Driving a 1993 Pontiac,probably sitting in a 15 year old third hand Lazy Boy,eating generic corn flakes and watching 15 year old movies on your VCR that you bought in a garage sale?Going out to dinner is probably splitting an 89 cent bean burrito with your whole family.
4-15-2009 @ 4:24PM
Dlackry said...
I think the people at the top need to take a big pay cut. How much does a person need to live. Millions? They take loans from tese companies and then the company forgives their loans. They don't have to pay taxes on their bonuses. Shame on the United States for allowing such practices. You say it's the unions fault. I think you should educate yourself on what really happens in this country. Example is AIG. They got caught. How many other companies have done exactly what AIG did. You blame the workers that stand on their feet all day doing the same job everyday.
4-15-2009 @ 4:58PM
Tony said...
glerchen: Your post is to the point and well taken. I agree, but what will it contribute to saving the UAW jobs about to disappear?
4-15-2009 @ 6:00PM
Tony said...
UAW workers make about $28 an hour (no legacy costs included), they work for that money and probably everyone of them works hard. They love their family, their country and maybe even the Big 3 a little bit. They are worried about their future and rightfully so. But they must be careful not steer themselves into a hard line stance with Gittelfinger. I do not know, but it feels like this President isn't screwing around. Protect yourselves and your jobs.
4-15-2009 @ 6:09PM
Kenneth Elrod said...
If you think the auto workers taking cuts in pay and benefits will bring down the price of an automobile, you are very mistaken.
When auto factories moved to Mexico and built cars and trucks paying 5.00 a day in wages with no unions to deal with, did the price of their cars and trucks come down? Sorry to say car price's stayed the same or went up in price. Hence, more profits for the Big shots & CEO's. When auto companies pass around Billions of dollars every year to CEO's for Bonus checks and invested in Jet Planes to fly their Big wheels around the world for vacations and Company party's, no wonder there's no money left to operate the plants. You can blame this on the UAW also cause all of you are so misinformed by the republican right that you believe anything they say. Remember this, When the oil prices went up who suffered most???YOU DID!
When the American Auto Companies go under, and the UAW is no longer speaking for the American workers, say goodbye to the middle class, say goodbye to paid vacations, Bye to paid holidays, paid sick leave, and any future pay raises for yourself. Cause without the Auto workers setting the standard, you can expect cuts in your benefits as well! Even if your wages are less anyway. If they take cuts, you as well can afford to be cut also, the trickle down affect will be in order, cause what's good for them is coming down to you too! Where's all these cuts going to end up? Right square into the pockets of the CEO's and Big Shots. Auto prices will stay the same and you will watch as the rich get richer and you get poorer.......Welcome to the NEW America! This is what you wanted!
4-17-2009 @ 1:42AM
CMEEKEY65 said...
No american car company should fail,Chrysler nor GM. What the hell has come over us as americans we are willing to let hard working uaw americans lose their life style.If anyone think working in an auto plant is a glamorous job they need to work on a production line for just a few days and they would know reality. Most of the working inviorment is filthy chemicaly cancerous. And now their health benefits are no longer and their is cut in half after the latest contract. C.Bailey,retired autoworker