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Fiat CEO: Unions must make concessions or else

04/15/2009, 9:23 AM

By Andrew Ganz

With just two weeks to go before the Fiat-Chrysler deal must be wrapped up, Fiat CEO Sergio Marchionne issued a strong ultimatum: “Absolutely we are prepared to walk” if Chrysler’s unions in Canada and the United States don’t agree to major concessions.

Fiat and Chrysler must reach an agreement by April 30 or else the U.S. Government will pull away its aid and let Chrysler be sold off in parts.

“There is no doubt in my mind,” Marchionne told the Globe and Mail. “We cannot commit to this organization unless we see light at the end of the tunnel.”

Marchionne gave the interview in Zurich at a UBS bank shareholders meeting. He was less than positive about the outcome of the proposed merger, saying that there is a 50 percent chance that the deal will fail.

“The dialogue is out of sync,” Marchionne said. “I think they need to see what state the industry is in. Canada and the U.S. are coming in as the lender of last resort. No one else would put a dollar in. This is the worst condemnation of the viability of this business.”

He urged the UAW and CAW to reach an agreement, stating that if they failed to do so, the ramifications would be far further reaching.

“But it will happen if a bankruptcy process drags on,” Marchionne said. “The UAW and the CAW have a unique opportunity here to change the framework of the discussion.”

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04/15, 9:31 AM

posted by:

SHOspeed

I seriously cannt understand how the Unions dont want to make deals, and would rather let their companies die then take less money. Totally insane.

04/15, 9:51 AM

posted by:

Long Dong Auto

Your Comment

04/15, 10:23 AM

posted by:

Jon Luc

It’s the union bosses that don’t wanna loose face, or their jobs as top togs. They gotta prove to people in the union, that they are worth their salary. Besides, it’s difficult to let go of all of the years of threatening, backstabbing, blackmailing, & other things they did to kill the companies.

04/15, 10:25 AM

posted by:

05Z88Path

Good-luck Sergio…the unions would rather shoot themselves in the foot then budge one inch!

04/15, 10:37 AM

posted by:

SeniorChief

Hopefully Ford will buy Jeep once the liquidation starts. Ford built most of the Jeeps that served in WWII, fitting that the take the brand, go back to basics and kill off the all the models with the exception of the Wrangler, Liberty and Grand Cherokee. Only those that can actually take on the Rubicon trail should wear the Jeep name. I can believe the crap that is sporting a Jeep badge right now, what were they thinking and why would someone buy such and f’ugly POS?

04/15, 10:42 AM

posted by:

A4

I can, SHO, its cause the Unions stand there and get overpaid to screw sh!t together, and they still figure the auto industry ain’t goin anywhere, “deuuuuuuhh everyone needs a car”, they say.

04/15, 10:45 AM

posted by:

JakeK66

Seems pretty easy. Take concessions or be out of a job. Can you understand that? Do they understand that? If not, maybe they should take a class in being out of work with no new employment in sight. Companies aren’t rushing to get tons of overpaid, undereducated employees.

04/15, 10:49 AM

posted by:

aexcorp

Well, you have to remember the long and arduous history of Unions in the US (not sure about the history in Canada though). They have been more than instrumental in making the quality of life for workers in manufacturing somewhat acceptable. It used to be that manufacturing jobs were pretty close to slavery in terms of shift hours and pay back in the mid-1800s and so they did a really good thing.

If you want more info on that, very interesting read is “A people’s history of the United States” by Howard Zinn, which is all based on primary sources and is highly enlightening…

That being said, nowadays they’re just stupidly greedy, trying to say that a guy working on an F-150 assembly line should get 40 bucks an hour plus pension and benefits. Clearly that’s not in line with the skills required for the job or the supply for these skills, especially when taking into account the global market, not just the US.

04/15, 10:51 AM

posted by:

moparsalesman1

These unions definitely suck ass and are destroying any fighting chance Chrysler has at achieving viability,

04/15, 10:55 AM

posted by:

elmdodge

unions have to realize that business is not gonna be crap forever and in time they will regain their position in the industry

04/15, 11:09 AM

posted by:

freeyellow2000

Fiat is playing the same game that the unions are playing. We would just have to see who is going to blink first.. The deadline is fast approaching.

regardless it a loss-loss situation for both parties if they can’t get to some agreement.

union — Underemployment
Fiat —- there goes the NA market

04/15, 11:11 AM

posted by:

A4

Hardly, freeyellow, Fiat is going to be in a buttload more trouble if they have to absorb a bunch of neverending debt.

04/15, 11:40 AM

posted by:

yarddog82abn

I for one hope there is no deal..!!!

The unions are out, then Fiat can just buy Dodge for a fraction of the cost. “Chrysler” will most likely die, and Jeep finds a new home, word is it that “International Trucks” will step in and pick up Jeep. But that just a rumor out of the Jeep forums… But ether way if that was the case hopefully the Scout can finally return. :D

04/15, 11:53 AM

posted by:

gugy

I hope unions die.

In my experience dealing with them makes me believe most of their people are incompetent, less educate, less qualified and less proficient to hold a job. They have huge benefits and no incentive to get better at their craft.
These same folks in the real world would just die due competition.

Sorry, but I have no compassion for them. I know it’s sad to see people suffer and lose their jobs, but lack of motivation and will to succeed it is sucks and I think unions promote that.

04/15, 12:04 PM

posted by:

Borat

yarddog82abn, that is probably what Marchionne either implied or is waiting for. Why pay premium today if you can get the same deal in 20 days for less? The reality is that union was part of Cerberus deal, so they do have some points in the company. The union will die, the company will die, but when redistribution of sale proceeds will occur, SOMEBODY will pick up what belongs to union. That is what Cayman Islands made of.

04/15, 12:15 PM

posted by:

johnnycanuck

Isn’t their some old fable about a scorpion crossing the river on an animals back, the scorpion promises not to sting the animal seeing as they’ll both drown and then does it anyway. That’s the union in a nutshell; they will screw this up. It’s their nature.

04/15, 12:20 PM

posted by:

shaver

The problem is not the present wages, its all the retirees, GM supports MANY times more people then it employs. The union is doing what its members want and need it to do. That is protect their best interest. You can argue they are pricing themselves out of job, but fact is if all the union jobs pay crap just like the non-union shops, then there is no union. So just giving it all away would be idiotic. Unfortunately the big 3 all made deals they could not keep or maintain. Now everyone blames the union because the mngmnt at big 3 were too weak to make the hard decisions necesary to be successful. For about the last 30 years. Thats BS everyone new legacy costs were going to hit unsustainable levels back in the 80s. Everyone on here who is bashing the union is a fool and does not understand much about skilled labor or corporate collusion. Just because you work with your hands does not mean you should be poor. Viva la middle class!

04/15, 12:20 PM

posted by:

idrinorbarsaku

god damn the unions! looks like even fiat is smarter than the other D2!!!!

04/15, 12:40 PM

posted by:

sctdiverdown

Agreed Shaver …….There are professions that have intelligent, hard working people (like
my wife who is a teacher – and one of the VERY GOOD ones) that need a Union because if
they didn’t – the school board would take anything it could …….it’s sad – but you have to fight
for everything these days, or it WILL be taken away from you given the chance.
Those in the situation know what i am talking about.

As far as the Auto Unions go, they are not what they used to be. But ther’re many that are intelligent, hard working and love what they do ….unfortunately – they are overshadowed by a lot of the negative that has creeped in the “system”.

04/15, 1:09 PM

posted by:

Impulsive

Bottom line … companies are NOT profitable.

Everyone, from the top down, MUST take a hit, unionized or not.

This bankruptcy concept was planned long ago through foresight knowing this situation would come to a head. There is nothing but one result … it’s just a matter of how one wants to come to that end … willingly or otherwise.

04/15, 2:01 PM

posted by:

Thunder Chicken

Shaver: The Big Three made deals that they could not afford because unions forced those agreements down their throats. “Give us what we want, no matter how outrageous our demands, or we’ll shut you down” is not bargaining in good faith, it’s blackmail. The companies had no choice but to cave in – it was either that or go out of business. Now the tables are turned, and it looks good on the unions.

And what of the unions’ responsibilities for the mess? You admit the big problem is legacy costs, but think the unions should accept no responsibility for their demanding the benefits that created those legacy costs? What, you think GM, Chrysler, and Ford just said “OK, unionized employees, here’s buckets of money to retire on, and we’ll take care of you and your family, cradle to grave”? The union blackmailed those benefits, and the legacy costs associated with them, out of the manufacturers, and now it’s coming back to bite them. If there is potential to save their jobs by giving back some of the benefits they should never have had to begin with, union rabble would be wise to accept the offer.

They won’t, though. The old union cry “Full pay to the last day” will ring loud, and the last day will come.

04/15, 2:18 PM

posted by:

Long Dong Auto

Well said Thunder.. it’s interesting how all transplant operations (Honda, Toyota, Hyundai, etc.) can build cars in the US profitably, with happy employees that continually vote union down, and with higher customer satisfaction and the US manufacturers can’t . Reason, overpaid workers and more folks on pension and healthcare than federal govt. Not to mention stupid and counterprodictive work rules. Unions may have had a place in the 20s and 30s but now are just an impediment to our ability to compete as a country. And don’t anyone give me any crap about protecting American jobs. The best thing we can do to protect jobs is make ourselves competitive with the rest of the world. If we can’t do a better job for less then we do not deserve the business.

04/15, 3:40 PM

posted by:

trantz

Low pay or no pay, what’s it going to be?

04/15, 4:19 PM

posted by:

SeniorChief

Unions in the auto industry served a purpose early on, but at some point out lived the purpose by becoming too greedy. But the Big 3 are not without guilt, they would have been happy to continue to pay minimum wages as long as possible. Had the two kept each other’s best interest in mind, things would not have got to where they are. They both got greedy and created such an animosity towards each other that all that mattered was winning at any cost. Well that cost is now coming due.

Once this has run its course and the Big 3 are whatever they become, maybe, just maybe, Labor and Management will figure out that one needs the other. Neither can survive without the other.

I will now step off my soap box…

04/15, 4:25 PM

posted by:

RationThinker

Workers must abandon unions or it will be their downfall as it has been for so many in the past. See The Politically Incorrect Guide to Capitalism.

04/15, 9:47 PM

posted by:

jayjc08

ThunderChicken- In recent times that’s what’s happened. But it was Ford, GM and to some extent Chrysler that actually promised that money to their workers, late pre to early post WWII. They were being a bit more than considerate and kind to those employees that did indeed diligently work for them. Most of these agreements were worked out in the late 50’s I believe. But as far as I know, the union had little to do with the framework that they layed for that generation. This generation is different however, as they’ve demanded it. Unions can be evil, look what they did to the British auto industry.

04/15, 9:50 PM

posted by:

Veda

“The best thing we can do to protect jobs is make ourselves competitive with the rest of the world. If we can’t do a better job for less then we do not deserve the business.”

+1 but if you’re lived in US your entire life and worked in a big corp like the Big 3, it’s really hard to accept this notion. But they need to face reality now or later.

04/15, 11:29 PM

posted by:

1c3d0g

SHOspeed: right on! D*amned unions…I hope that once all this mess is sorted out, all of the Domestics are on a level playing field with imports.

 
 
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