The UAW has a huge problem
Perhaps it all begins to make sense, now. Perhaps hiring Bob Nardelli was part of a plan to break the union. Perhaps becoming non-union was the Chrysler/Cerberus plan all along.
It appears probable that United Auto Workers members will vote down the contract negotiated with Chrysler. Though the last votes are yet to be taken, the most recent voting went against the contract and the locals still to vote – in particular, the Belvidere, Illinois assembly plant – are likely to oppose the deal. The final results will be in by late Friday. Current UAW leaders will have more on their hands than negotiating a new contract, as defeat of the Chrysler contract will put Ron Gettelfinger on the hot seat. Before he can deal with Chrysler, he will have to extinguish the dissidents in his own organization.
So, should the contract be voted down, what happens next?
First, Ford gets to roll along without a new contract, which is NOT good for Ford. Ford needs to cut some expenses, and Ford management is not going to wait indefinitely for the UAW to sort out their problems at Chrysler.
Second, GM gets to laugh. GM got exactly the contract it wanted and its union members made it clear, by ratifying that contract, that they believe the company has a future. They’re probably right.
Third, Wall Street awaits a win for the new Chrysler. There is no way that the new owners of Chrysler can be perceived as conceding to the UAW. There are still billions of dollars of bonds to finance the Chrysler deal that are unsold, still on the hands of the investment bankers. Even at a discount, they’ve been unable to unload them. Anything – anything – that makes it look less likely that Chrysler will make it will diminish the price of those bonds and the ability to sell them. Anything that makes it seem that the bruiser that Cerberus hired to be the Chrysler boss is, in fact, a wimp will terminate the banks’ ability to dump those bonds anywhere but the waste bin.
So, don’t expect the management at Chrysler to sweeten the pot. They didn’t hire Nardelli because they wanted a deal with the UAW. They hired him because he’s a known quantity. He crushed labor at Home Depot. Granted, he crushed Home Depot in the process, but that’s not the point. Cerberus can dump him if he doesn’t produce.
At this point, the UAW has a huge problem.
It cannot negotiate with credibility at Ford until it settles with Chrysler.
It cannot cut a deal at Chrysler which is materially different than the deal it cut with GM.
It cannot expect Chrysler to commit to future product plans at the level that GM did, because Chrysler doesn’t have those plans.
The leaders of the UAW must get a deal with Chrysler very similar to the one that has already been negotiated to have any credibility at Ford.
Plus, Ron Gettelfinger is dealing with an internal revolution which threatens to get out of hand.
But none of that is the real problem at the UAW.
The real problem at the UAW is stupidity.
That would be the mentality of those who are voting down the deal with Chrysler.
They are about to find out how good they once had it.