Why I think the UAW is right

[Buick61]

Since November, Ford has been pushing itself as being different from GM and Chrysler. They've profited immensely from the good exposure brought to them by GM and Chrysler's misfortune. Ford banks on the fact that they didn't seek TARP funds (but quietly took billions in DOE "loans"), didn't go through the bankruptcy process, and isn't run by the government.

Yet, they want all the benefits (to labor costs) of going through bankruptcy with none of the baggage.

The UAW gave additional concessions to GM and Chrysler because everyone was sacrificing. GM and Chrysler went out of business! CEOs lost their jobs, thousands were laid off, debt holders got shafted...so the UAW agreeing to a new contract was just something they had to do.

Now high and mighty Ford wants in on the action, and the UAW scoffs at it. I say: too bad Ford. You can't have it both ways. You can't try to distance yourself from the fray when it's advantageous for your PR, but then expect to get the same benefits as those who went through the battle.

I want Ford to succeed. I don't want them to game the system on one side, while projecting a holier-than-thou attitude on the other in order in order to get that success.

You want the same labor contract that GM and Chrysler "enjoy?" Declare bankruptcy, fire Mullaly, get dragged through the mud by every media outlet and anti-government, anti-corporation blogger, and have every two-bit congressmen calling you every day about every little action you take that affects one of their constituents, and then, just maybe, we can talk about you paying new hires less money.

And, pssst, press releases on your Billion dollar net income doesn't help your "we're struggling under the current labor contract" position.

Oh, and you already moved your bread and butter cars to Mexico for production. How is that for a slap in the American workers' faces? Threatening to move more products there as a coercive bargaining tool will only make you look worse.

[wescoent]

Firing the CEO? Painful restructuring? Dragging their name through the mud? Loss of prestige?

Already took care of that, thanks.

Bill Ford fired himself in 2006, thousands of white collar workers laid off, lambasted for YEARS due to their debt load and apparent 'inability to compete without borrowing billions', and had to shed their prestige brands to focus on the bread and butter.

[Member17739]

Ford already received majority of the concessions GM and C received. The completely new contract, for the big 3, is coming in 2011. Traditionally, they all receive the same contract. What happened over the last few days is not as big of a deal as some are making it to be.

[Buick61]

Originally Posted by wescoent

Firing the CEO? Painful restructuring? Dragging their name through the mud? Loss of prestige?

Already took care of that, thanks.

Bill Ford fired himself in 2006, thousands of white collar workers laid off, lambasted for YEARS due to their debt load and apparent 'inability to compete without borrowing billions', and had to shed their prestige brands to focus on the bread and butter.

And? GM and Chrysler did most of that before bankruptcy, too. Bankruptcy and the bailout funds jumped it to a whole new level, and you know that.

[prowlerjc]

Won't the UAW be SOL if they just let the contract run out? When does the current one expire?

[All-Or-Nothing]

Originally Posted by prowlerjc

Won't the UAW be SOL if they just let the contract run out? When does the current one expire?

I think some time in 2011 they expire.

[prowlerjc]

Well, then Ford should let them expire and just hire new folks as they see fit.

[fp115]

Originally Posted by Buick61

And? GM and Chrysler did most of that before bankruptcy, too. Bankruptcy and the bailout funds jumped it to a whole new level, and you know that.

Exactly. Ford's cuts so far are short term solutions for something that is supposed to be long term. Cleaning out most of the debt, changing the union structure, and making massive structural changes to the business means that 20 years down the road, they will be better businesses.

Looking at Ford right now, they are only structured to do well in the short term, but in 5 years from now, these problems will only come back to haunt them, because they haven't resolved them, just pushed them to the side. UAW workers do not understand what long term goals mean like any reasonable CEO, COO and CFO. The UAW is right in assessing the health of Ford on the current day, there is no reason for them to even think about the future.

[Buick61]

Originally Posted by fp115

Exactly. Ford's cuts so far are short term solutions for something that is supposed to be long term. Cleaning out most of the debt, changing the union structure, and making massive structural changes to the business means that 20 years down the road, they will be better businesses.

Looking at Ford right now, they are only structured to do well in the short term, but in 5 years from now, these problems will only come back to haunt them, because they haven't resolved them, just pushed them to the side. UAW workers do not understand what long term goals mean like any reasonable CEO, COO and CFO. The UAW is right in assessing the health of Ford on the current day, there is no reason for them to even think about the future.

They can worry about that when the contract is up for renewal in 2011.

[fp115]

Originally Posted by Buick61

They can worry about that when the contract is up for renewal in 2011.

I am not saying they should do it now. But for people to even suggest that Ford is the healthiest auto business is delusional. Ford is showing the same problems as all other of the auto manufacturers, so far they have been masking it with other programs and their debt hasn't begin to shrink enough. Their next debt swap will be interesting to see if it succeeds.

As Ford has set themselves up for short term profits and cleaner books throughout the next couple of months, it will make every bit of bargaining more difficult, mainly because people are greedy and see no value into helping a business that looks healthy.

[mgescuro]

Sorry Aldo.... UAW needs to give up the concessions... yesterday.

You're fooling yourself if you believe that Ford is a healthy company. You're in B-school now, do a SWOT analysis on Ford. Do simple ratio analysis on Ford. Do a cursory inspection of their balance sheet and cash flow statements.
They are NOT a healthy company.

Just because it looks like they're firing on all cylinders, doesn't actually mean they are. All it proves is that they are healthier than GM and Chrysler. Which is like saying, GM and Chrysler had the swine flu while Ford only has the regular flu. You can easily die from either strain of flu.

What's the use of going to business school if you don't use your noggin.

[fp115]

Originally Posted by mgescuro

Sorry Aldo.... UAW needs to give up the concessions... yesterday.

You're fooling yourself if you believe that Ford is a healthy company. You're in B-school now, do a SWOT analysis on Ford. Do simple ratio analysis on Ford. Do a cursory inspection of their balance sheet and cash flow statements.
They are NOT a healthy company.

Just because it looks like they're firing on all cylinders, doesn't actually mean they are. All it proves is that they are healthier than GM and Chrysler. Which is like saying, GM and Chrysler had the swine flu while Ford only has the regular flu. You can easily die from either strain of flu.

What's the use of going to business school if you don't use your noggin.

Of course they needed to, but what is in it for them? The entire tactic behind negotiations, especially with unions is who has the most power will control the tone of the negotiation. The three major factors behind negotiating such contracts is an upside down pyramid which goes through "Power","Rights" and then "Interests".

The reason the UAW and CAW have been so generous in the negotiations with GM is because the power has shifted from the unions back to the corporations. The corporations had the government backing them up in saying they can take the production elsewhere if they could not agree to something cost effective. GM was able to show more power than Chrysler, which has resulted in even greater concessions.

Then when going down the path of rights, the unions were pointed out as non-cost effective and were proven that their lack of commitment in reducing total wages meant that these business had to declare bankruptcy. Pushing for major concessions would fix the situation and make their wrongs a right.

Finally once both of those two issues were resolved, going down to interests is when the real bargaining began. GM and Chrysler were looking to become liquid again and the UAW was looking to be extremely competitive. After nailing the power and rights, this part becomes very simple to bargain because everyone knows their place.

In most negotiations, power and rights are usually skipped because the importance is played out through interests. Corporate and Union negotiations have the flipped pyramid effect which means that unless the corporation does not show any signs of need or power, they will be overtaken by their union, exactly as the UAW is currently doing.

[mgescuro]

Originally Posted by fp115

Of course they needed to, but what is in it for them? The entire tactic behind negotiations, especially with unions is who has the most power will control the tone of the negotiation. The three major factors behind negotiating such contracts is an upside down pyramid which goes through "Power","Rights" and then "Interests".

The reason the UAW and CAW have been so generous in the negotiations with GM is because the power has shifted from the unions back to the corporations. The corporations had the government backing them up in saying they can take the production elsewhere if they could not agree to something cost effective. GM was able to show more power than Chrysler, which has resulted in even greater concessions.

Then when going down the path of rights, the unions were pointed out as non-cost effective and were proven that their lack of commitment in reducing total wages meant that these business had to declare bankruptcy. Pushing for major concessions would fix the situation and make their wrongs a right.

Finally once both of those two issues were resolved, going down to interests is when the real bargaining began. GM and Chrysler were looking to become liquid again and the UAW was looking to be extremely competitive. After nailing the power and rights, this part becomes very simple to bargain because everyone knows their place.

In most negotiations, power and rights are usually skipped because the importance is played out through interests. Corporate and Union negotiations have the flipped pyramid effect which means that unless the corporation does not show any signs of need or power, they will be overtaken by their union, exactly as the UAW is currently doing.

Why are you lecturing on negotiation tactics? We're not talking about negotiation tactics.
We're talking simple business common sense.

Ford cannot survive without labor cuts. They have over $24B in debt load currently.

The UAW is not cost effective. And they haven't been for decades. They are a layer of bureaucracy, that is easily resolved by self-monitoring and current federal and state labor laws.

Also realize that the power in the negotiations is also a factor of perception.

[Simon says]

Originally Posted by Buick61

Since November, Ford has been pushing itself as being different from GM and Chrysler. They've profited immensely from the good exposure brought to them by GM and Chrysler's misfortune. Ford banks on the fact that they didn't seek TARP funds (but quietly took billions in DOE "loans"), didn't go through the bankruptcy process, and isn't run by the government.

Yet, they want all the benefits (to labor costs) of going through bankruptcy with none of the baggage.

The UAW gave additional concessions to GM and Chrysler because everyone was sacrificing. GM and Chrysler went out of business! CEOs lost their jobs, thousands were laid off, debt holders got shafted...so the UAW agreeing to a new contract was just something they had to do.

Now high and mighty Ford wants in on the action, and the UAW scoffs at it. I say: too bad Ford. You can't have it both ways. You can't try to distance yourself from the fray when it's advantageous for your PR, but then expect to get the same benefits as those who went through the battle.

I want Ford to succeed. I don't want them to game the system on one side, while projecting a holier-than-thou attitude on the other in order in order to get that success.

You want the same labor contract that GM and Chrysler "enjoy?" Declare bankruptcy, fire Mullaly, get dragged through the mud by every media outlet and anti-government, anti-corporation blogger, and have every two-bit congressmen calling you every day about every little action you take that affects one of their constituents, and then, just maybe, we can talk about you paying new hires less money.

And, pssst, press releases on your Billion dollar net income doesn't help your "we're struggling under the current labor contract" position.

Oh, and you already moved your bread and butter cars to Mexico for production. How is that for a slap in the American workers' faces? Threatening to move more products there as a coercive bargaining tool will only make you look worse.

The emotional angle does not work on the business world. But in any case Ford has gone through as much pain as GM and Chrysler. Their pain was better timed that's all. The reason being that Bill Ford and Alan Mulally are way better managers with better vision than Wagoner or Bob Nardelli ever will.

Basically your theory is that Ford ought to be punished for its success, which I guess is shared by some people but that doesn't make it any less ridiculous.

What you call GM and Chrysler misfortunes were self induced wounds, mortal wounds if you will, inflicted by incompetent, selfish and stupid management. And You, me and every other tax paying person in this country, including the members of the UAW, ended up paying for their mistakes. Ford was not foreign to the stupidity and lack of vision but Ford unlike GM and Chrysler, reacted. Now you want Ford to suffer for having rectified earlier, for having spared us the burden of having to bail them out too. Brilliant!

Its known how much you hate the fact that Ford makes cars in Mexico, for some reason you are less severe with Chrysler building their bread and butter trucks, the only thing that more or less sells from that dead man walking of a company, down there. But you are somehow more complacent about vehicles made in Canada. I guess then that you will be pleased to see that if the UAW persist in the suicidal manners that seems to be the future. The CAW was much more intelligent than our local boys I am sad to see. One thing the UAW knows for sure is that when the good times roll, the American car makers and VERY generous.

Ford has announced that they will move the Kuga's manufacturing to Kansas to supply both the US and the European markets. How about that to offset the announcement of a $1 billion profit?

Thanks for sharing though.

[fp115]

Originally Posted by mgescuro

Why are you lecturing on negotiation tactics? We're not talking about negotiation tactics.
We're talking simple business common sense.

Ford cannot survive without labor cuts. They have over $24B in debt load currently.

The UAW is not cost effective. And they haven't been for decades. They are a layer of bureaucracy, that is easily resolved by self-monitoring and current federal and state labor laws.

Also realize that the power in the negotiations is also a factor of perception.

I wasn't lecturing you persay, I was merely adding onto the discussion. The UAW would see no benefit to agree to any cuts.

I agree 100% with what you are saying, but I cannot see the UAW or the CAW agreeing to most of what they agreed to when negotiating with GM and Chrysler. Until there is a shift of power or rights, Ford will find itself eating away or giving back to these unions before any major concessions are agreed to.

Of course power is usually used as perception and even intimidation at times.