Free Markets, Free People

Fiat CEO Says Chrysler Deal Up To UAW

A fairly clear statement of intent if you ask me:

Fiat would walk away from a tie-up with US carmaker Chrysler unless unions agreed to a new, lower wage deal, Sergio Marchionne, the chief executive of the Italian motor manufacturer, said.

In an interview with Canada’s Globe and Mail newspaper, Mr Marchionne said he would scrap the deal unless Chrysler unions agreed to match the lower costs of Japanese and German-owned plants in Canada and the US.

“Absolutely we are prepared to walk. There is no doubt in my mind,” Mr Marchionne said in comments published online. “We cannot commit to this organisation unless we see light at the end of the tunnel.”

So, UAW and associated unions, job or no job?

Your choice.


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8 Responses to Fiat CEO Says Chrysler Deal Up To UAW

  • they will choose no job and try to get the government to force Fiat into it.

  • I’ve seen union management make rational decisions about these things, but their batting average isn’t good. I think the union management fears that if they allow wage cuts to the same level as the (non-unionized) foreign manufacturers, the members will rationally begin to ask whether the union serves any purpose.

    The scary part for me is not unions in the private sector, because even stupidities such as forcing auto companies to acceed to union demands gets punished in the long run through loss of union jobs and members. The scary part is public sector unions gaining power. The feedback mechanism to prevent them from forcing stupid agreements is much, much weaker. We already have over-paid bureaucrats relative to the work they do and the value they deliver (and I have friends that work for government who will tell you that). Public sector unions could make that much, much worse. 

  • I heard is was primarily the CAW causing the problem.  CAW split away from the UAW some time ago and their relationship isn’t always amicable. 

    • The CAW is more left wing than the UAW and has the NDP and Liberal parties on speed dial.  

  • For the company to survive, the union must die. Period.
    Fiat, who hasn’t been doing busienss to speak of in the US for the last 30 years, (likley due to the over-reaching government here, and the abysmal Unions) and who has serious understanding of what Unions will do to a company…(Take the Melfi strikes, as a prime example) is in a position to be able to speak the truth of the matter, without fear of reprisals of ‘good government’.
    Which in turn is mostly why we’re not seeing the press going wall to wall with coverage of the thing.

  • I’m now a fan of Mr Marchionne.

  • Fiat will do the deal because the fed taxpayers will somehow end up subsidizing the UAW wages.

  • OldMan,
    That’s as may be. I’ve been saying since day one that this was always about saviving the UAW, and who cares about the company.