Chrysler and its Unions: Fight to the Death?

Chrysler, the UAW, and the even more militant Canadian Auto Workers union seem determined figuratively to gouge, eye-poke and kick each other in the shins, right up to Chrysler’s May 1 date with bankruptcy.

Chrysler CEO Bob Nardelli and Co-president Tom LaSorda wrote a letter to CAW members last week, asking them to match labor rates with Toyota Canada. According to Chrysler, Chrysler Canada’s “all-in” labor costs are $76 per hour, versus $57 per hour at Toyota Canada. Chrysler followed that demand with a laundry list of pay and benefits it wants to cut.

“Time is very short,” the letter said. Chrysler has until May 1 to conclude a partnership with Fiat, and to win concessions from the unions and from Chrysler’s creditors. If those negotiations fail, the U.S. Treasury Department is promising to withhold its support and drive Chrysler into bankruptcy.

CAW members responded late last week by publicly burning copies of the letter.

Chrysler responded with a statement from Al Iacobelli, Chrysler chief bargainer and vice president, employee relations: “We continue to work around the clock with the CAW in order to reach an agreement that meets the guidelines set before us by the Canadian government which includes immediately closing the competitive gap with Canadian transplants.”

Even that bureaucratese could be considered fighting words by the union – whose “competitive gap” is it, anyway?

Meanwhile, would-be partner Fiat – which knows all about militant unions – is ostentatiously keeping Chrysler at arm’s length. Fiat went out of its way this week to deny a report that its partnership with Chrysler was “90 percent” completed.

“No agreement has been concluded between Chrysler and trade unions in the U.S. and Canada and the assertion that the overall agreement has been 90 percent defined is untrue. The talks remain completely open and it is not currently possible to predict the timing or the outcome,” a Fiat spokesman said.

The UAW issued a separate statement on April 22 along the same lines: “Contrary to some media reports … no agreement has been finalized.”

Meanwhile, the UAW is encouraging its members to write letters and send e-mails to President Obama, asking him to protect their jobs and also retiree benefits.

For anybody who wants to see Chrysler avoid bankruptcy, you can only hope that the slashing on Chrysler’s part and the burning on the union’s part are just public posturing and negotiating tactics. Behind the scenes, maybe they’re working something out. Either way, it seems clear that the argument will run up to the very last minute.

Photo: CAW