Home > Auto Industry, CAW > A CAW workers voice of insanity.

A CAW workers voice of insanity.

April 22nd, 2009

Paulsstuff wrote A CAW workers voice of reason last Friday and has an interwebs hit on his hands, his post going so far as to being quoted in the National Post. Good on you Paul my friend, you done good. And frankly, you make a lot of excellent points that I have little disagreement with. (side note to Paulsstuff: my spidey sense says you work at the Brampton plant, as I do. Say hey to me sometime). So why do I disagree with him on the general premise? There are a lot of people asking us Chrysler workers to take one for the team, not one of whom has any, to borrow a Presidential phrase, skin in the game.

Just over ten years ago, successful, profitable Chrysler had a bankroll that was rumoured to be close to $10B. This was money that properly belonged to the stockholders, who had forfeited dividends to create a cushion, they were told, for the next time there is a downturn in the industry.  That downturn came in early 2000, and the money was gone.  Somehow, the money made it’s way back to Germany, somehow, Chrysler had no money. Daimler, it could be well argued, profited nicely from the “merger of equals.”

In 2007, Cerberus capital picked up 80% of Chrysler, as well as Chrysler financial. They also own GMAC, GMs financing arm. The extremely profitable Cerberus, has refused to put any of it’s assets into helping Chrysler, deeming it bad investment. That’s a problem, but here’s worse. The financial arm of Chrysler and GM, both Cerberus owned, heavily tightened rules regarding leasing. People buying cars these days report they can’t get financing through Chrysler credit: off to the banks they must go. So the ownership of Cerberus won’t invest in Chrysler, the financial arm of Chrysler, owned by Cerberus won’t loan people money to buy cars. And finally, Chrysler Financial won’t be taking $750M in federal bailout money, it is reported, because executives don’t want limits on their pay.

These are the people I am supposed to take a pay cut to help?

A new player on the scene is Fiat. Here’s their idea: they pay $0.00, they assume debt equalling $0.00 and they get 20% equity in Chrysler. The condition, I have to take a pay cut. In short, Fiat will take the 20% with no risk only if I, and my fellow workers, buy it for them.

Finally, there is Industry Minister Tony Clements, whose riding is Brampton and, I hope, everybody who lives in his riding and works at Chrysler remembers when their jobs were on the line, he went to bat against them. Clements has tax money aplenty, my and your tax money, and he’s willing to throw it away, if I take a pay cut.  This government may think they are having a good laugh, screwing the union now that they have a chance, but as I have pointed out before, the union may vote for Jack Layton and Paul Martin, but many of the workers vote Conservative – I well remember Clements old boss Mike Harris being at the plant and a line-up of people to meet him, all wanting to let him know they support him, even if their leadership says otherwise.

To Paulsstuffs specific points, I have little quibble. If they want to ditch the legal plan, tuition coverage, various secondary health benefits, have at it. But does anybody believe what ails Chrysler is too much orthodontics? Paying my legal fees when I move every ten plus years? I argued two years ago the extreme mis-management case, and I stand by it.

However, one point I’ll disagree with Paulsstuff: two tier wages. It’s not that I don’t see the seduction of this, and furthermore, it’s not the supposed to be the unions job to save the company from itself. But since that’s what these talks are about, saving the company from itself, it apparently now is the unions job. But you see, two tier wages will just make everything worse.

Remember that extreme mis-management I was talking about. Here’s an example: everybody, but everybody, agrees the biggest problem is “legacy costs,” ie. pensions and benefits paid to retired workers. Last year, when the UAW decided to give two tiered wages, what was the result? The companies threw over $100,000 buyouts on the table for older workers to leave, many of whom retired to the legacy cost side of the ledger.  They filled their jobs with younger cheaper workers, but put guys in pensions who wouldn’t otherwise be in pensions, and might not be for years.  They lowered operating costs, they added legacy costs.

I have a hard time accepting that I have to do more for less (after 20 years, my holiday time is decreasing by anywhere from one to three weeks) when the people asking for sacrifice have so little real stake in the company.  Lots of people who stand to benefit if the miracle happens, but the only people with any money at stake seems to be the workers (and suppliers, of course).  And if I thought it wasn’t just prolonging the agony, I might fall in line anyway. But this parrot is dead, and all anyone is realling asking the workers to do is nail it’s feet to the perch. Paul, if they can’t make a go of it with GMs deal, after three other round of concessions in the past three years, then they can’t make a go of it. Perhaps it’s time to let Chrysler run down the curtain and join the bleedin’ choir invisible.

Auto Industry, CAW , , , , , , , , , , ,

  1. April 22nd, 2009 at 12:01 | #1

    Nice writing. You are on my RSS reader now so I can read more from you down the road.

    Allen Taylor

  2. paulsstuff
    April 22nd, 2009 at 12:12 | #2

    Excellant post Brian, you made some excellant points. I will be doing a follow-up post shortly regarding much of what you said here. What I should have pointed out on my blog, as you have done here so sucinctly, is that both management and bondholders also need to step up and take a comparable cut/loss as well. I read the story shortly after my blog posting about Chrysler Financial turning down the $750 million because it carries strings in regards to managemnet pay and bonuses. The fact Cerberus and the bondholders are willing to pay a higher interest rate to ensure their own pay/benefits/bonuses remain intact has me second guessing my views on more concessions.

    And your spidey senses are correct. I do work at Brampton assembly. :0)

  3. A Nonny Mouse
    April 22nd, 2009 at 12:59 | #3

    So don’t work, non-negotiate your self into employment oblivion, get a great job at McD’s while your waiting for your UI and then welfare to kick in, let your area become a waste land where property values are a quarter what they were.

    Just never come to me for a single freaking penny in Bail out funds to compensate you for your stubbornness and anal inability to see the writing on the wall..


  4. Powell Lucas
    April 22nd, 2009 at 14:34 | #4

    So what’s it to be A Nonny Mouse…continue to roll back employee wages and benefits until they fall in line with McDonalds and Wal-Mart? If Chrysler goes down the tubes does that mean their market share just disappears? Will it not be filled by another firm? Will tire sales, and repair shop sales, and gasoline sales fall by an equivalent amount if Chrysler is suddenly taken out of the market? If Chrysler goes belly up in Canada and moves its operations to the U.S. do they think they will retain even the small share of the Canadian market they now have? I think not. I drive a Chrysler, but if they move to the States it will be the last one I’ll ever drive. And this comes from a guy who used to be a solid Sears customer until I found out how they colluded with Sony to wipe out the domestic TV manufacturing market. I haven’t so much as set a foot in their stores in 25 years.
    Besides, it takes two to reach a deal on a contract. Chrysler could have said no.

  5. Attila
    April 22nd, 2009 at 15:12 | #5

    “So what’s it to be A Nonny Mouse…continue to roll back employee wages and benefits until they fall in line with McDonalds and Wal-Mart?”

    To be brutally honest, unskilled labour is unskilled labour, so why not?

  6. Snoop Dog
    April 22nd, 2009 at 18:50 | #6

    Attila- to be fair, auto workers are considered semi-skilled. The problem is that the auto execs would have done a better job if they were semi-skilled. It was not the cabin boy on “D” deck’s fault that the Titanic slammed into that iceberg and sunk. He simply picked the wrong ship on which to work. So it is with the CAW in general and workers at Chrysler in particular. You can point fingers at each other on the deck for another week or so but it might be more useful to look for a life vest or a rowboat and get away from the ship while you can.

Comments are closed.