Union Acknowlegdes Financial Crisis At GM - But Makes Ford Strike Target

[Perian]

Source: Financial Times & Associated Press

CAW acknowledges financial crisis at GM
By Bernard Simon in Toronto / Published: September 8 2005 17:59

The Canadian Auto Workers union has acknowledged the financial crisis facing General Motors by putting the world's biggest carmaker at the back of the line in talks on a new labour contract with the three Detroit-based carmakers.

“There's an incredibly dark cloud hanging over our bargaining with GM,” the union's president Buzz Hargrove said on Thursday.

Article continues at www.ft.com

Canadian Auto Workers Union Picks Ford As Target in Master Contract Negotiations

TORONTO (AP) -- The Canadian Auto Workers union said Thursday it will try to negotiate a master contract with Ford Motor Co. by next week and then ask other U.S. automakers to match those terms.

CAW president Buzz Hargrove said the union picked Ford because it has always had a good relationship with the company.

"We've had one strike in the last 30 years with Ford," Hargrove said.

If the union can't negotiate a contract with Ford by midday Tuesday, it will try to negotiate an agreement with DaimlerChrysler AG's Chrysler Group, Hargrove said. General Motors Corp. also will be asked to match the deal negotiated by the union and the target automaker.

Negotiations with all three automakers began in July. Their three-year labor contracts with the CAW expire Sept. 20, and the CAW could strike Ford or Chrysler if agreements aren't reached. In late August, CAW members voted overwhelmingly to authorize strikes if necessary.

The automakers are hoping to control their growing labor costs in this round of negotiations. Canadian labor costs grew about 5 percent each year under the 2002 contract, and all three automakers said this week they can't afford similar growth this time around.

Article continues at: http://biz.yahoo.com/ap/050908/auto_...nada.html?.v=4

[Perian]

Originally Posted by Perian

CAW president Buzz Hargrove said the union picked Ford because it has always had a good relationship with the company.

With friends like this...

[paul3230]

Wow..it's got to be serious for the CAW to put GM in the back of the pack. Basically, they want the best package possible and they can't do they with GM. In a way, I'm kinda happy because it means the union can acknowledge that they really need to help GM and not just force them into bankruptcy

[Maetrix66]

I love how they try to make is sound like they are doing GM a favor by not coming after them first. Let me cut through all of the BS by telling you why they are doing it this way. GM is obviously weighing it's options right now with how to cut costs. If they come after GM, they may be apt to stiff the CAW and shift production stateside. They really aren't in a mood to fork over a lucrative contract, and the CAW knows this. They are picking on the easiest pushover, Ford, and then will take it to Chrysler, who is far more likely than GM to sign whatever Ford agrees to. They will then have the security of the contracts in place at Ford and Chrysler to provide jobs for their union, and then they at least have some leverage to come after GM with.

GM can see this coming. I can't see the benefit of having a seperate Canadian Union to argue with, when they have so many workers in the US who don't have to return to factories yet still get paid, and it isn't as if they don't have enough factories to be able to pick up the extra capacity. This will allow them to get the US union issue out of the way before they decide what to do with Canada. If the US Union agrees to cutbacks on benefits, then they can use that as leverage to get a better deal than the other two Co's. I could see having factories in canada if the company was stationed in texas, but in Michigan?? Just dust off the employees who are sitting on their fat @$$#$ and tell them to get to work, and give the CAW the finger.

[Dizzer]

Listening to these clueless dinosaurs is more than I can take. "We know we're taking down GM, so were going to negotiate an even more ball-busting pact with Ford and try to get GM to sign on". And more of their jobs will disappear.

[jbartley]

QUESTION for those of us that aren't so sure:

WHAT is made in canada that CAN'T be made somewhere else in the US?

[paul8488]

Originally Posted by Maetrix66

Just dust off the employees who are sitting on their fat @$$#$ and tell them to get to work, and give the CAW the finger.

So give the finger to the men and woman that build at the top quality plants in North America? Great idea! We forget that not every union member is a slob who won't work. Oshawa doesn't build great quality vehicles by accident... the workers get credit for sure.

[tgagneguam]

Originally Posted by jbartley

QUESTION for those of us that aren't so sure:

WHAT is made in canada that CAN'T be made somewhere else in the US?

For better or for worse, it would appear that many manufacturers are asking a similar question: What is made in North America that can't be made elsewhere in the world?

[Maetrix66]

So maybe that was a strong way to say it.

My point is, is that GM keeps complaining about it's high legacy costs (having to pay benefits and wages to employees that are not producing (either temporarily or permanently), and this is a way to cut them considerably.

[paul8488]

Is Canada the problem though? If anything I'd bet the situation is better here, as we have free healthcare.

[tgagneguam]

There's nothing wrong with Canada (or the US for that matter), paul8488. I think it's the perception (real or not) that manufacturing costs are lower in other parts of the world. Of course, as indicated in an article on this site, problems with infrastructure often times mitigate the gains from lower wages paid to workers, as do other factors.

I think "free" healthcare is a misnomer of sorts. I imagine that in Canada healthcare is subsidized, in part, through higher [corporate] taxes, though I'm not certain. There's not much in life that's truly free.

[johnny smallblock]

Originally Posted by paul8488

Is Canada the problem though? If anything I'd bet the situation is better here, as we have free healthcare.

Seriously, the quality is great and they don't have to pay for all the healthcare. Is it any wonder US manufacturing is in so much trouble? We really need a national healthcare system of some kind.

[jckjds]

Nationalizing healthcare doesn't solve any problems. It just allows us to pay for a our medical care through taxes instead of payments to the insurance company. Now, there is a good argument to be made that national healthcare can be run more cheaply OVERALL (i.e. less money paid in taxes than would be paid to private health insurance), but there are convenience and quality of care "costs" of doing that. The real issue is that UAW and CAW workers are paid probably quadruple their market value, which is inherently inefficient, and kills the Big 3s competitive advantage because Koreans, Mexicans, and Chinese get paid much less. It is a tribute to the Big three that they still manufacture many/most of their cars in the US when they could do so much more cheaply in Mexico or elsewhere.

I truly don't think that GM is just going to fall in line with the collective bargaining agreements (CBA's) that Ford and Chrysler negotiate. If they are going to continue to be competitive, their workers are going to have to take pay cuts (by pay cuts I mean cuts in total compensation, whether that be pay, insurance, whatever). I think the most recent financial crisis and the unions' lack of response to it will give GM just the incentive it needs to take a hard line with the unions.

At least in the US, if the workers go on strike, GM is free to hire PERMANENT replacement workers (scabs) at any rate that it chooses (i.e. not the rate in the CBA). This would also probably break the union. If I were Gm , I'd build up inventories and hire a lot of new workers (who are less likely to join the strike--superscabs) right before contract negotiations. I'd provide a reasonable total compensation package (e.g. $50 per hour total compensation including benefits, wages, retirement, etc.) and tell the union that we can negotiate how that compensation will be split and what the health insurance specifics should be, etc, but that the amount of total compensation is non-negotiable. If they choose to strike, I'd hope that the new workers would choose not to participate in the strike and I'd hire additional permanent replacements to take the positions of the strikers. Of course, I'd tell the strikers first and give them an opportunity to accept the offer made to the union and keep their jobs. The simple fact is, if they don't make changes, there won't be any manufacturing jobs left to bargain about.

[mbukukanyau]

Originally Posted by tgagneguam

For better or for worse, it would appear that many manufacturers are asking a similar question: What is made in North America that can't be made elsewhere in the world?

Originally Posted by jbartley

QUESTION for those of us that aren't so sure:

WHAT is made in canada that CAN'T be made somewhere else in the US?

UAW in the US is worse.. They refused to even consider easing the pressure on GM… They think that if GM dies, they will be better off…
Meanwhile Buick has no platforms and Toyota’s Lexus is sailing ahead like a steam icebreaker

[mjd1001]

Of course we have gone over and over this topic regarding the CAW and UAW for months now. Most people on these boards have said the union is being unreasonalbe, while a few others are saying it's not the Union member's fault and that GM is mostly to blame for their financial difficulties.

I have to side against the Union on this one. Whether we like it or not, to be competitive, GM, Ford and DCX must become a lot leaner. This means not only not extending union benefits and wages, but probably cutting back on them.