As a condition of its government-funded restructuring, GM was supposed to wrangle concessions from its unions and bondholders. So far, the General has struck out with the major bondholder committee and the UAW, and has only had its agreement with the Canadian Auto Workers to crow about. But now that agreement appears to be in peril, as Reuters reports that Chrysler and Ford are rejecting the terms of the GM CAW restructuring. “The current agreement with GM is unacceptable and we have to break the pattern,” Chrysler’s Robert Nardelli told Canada’s House of Commons. “We believe the recently negotiated agreement between General Motors Canada and the Canadian Auto Workers will not keep Ford’s Canadian operations competitive in today’s global economy,” concurs Ford Manufacturing Maven Joe Hinrichs. While GM claims that its CAW deal brings labor costs in Canada in line with US transplants, Nardelli claims “the union agreement with GM, if applied to Chrysler, would not eliminate even half the labor cost gap Chrysler Canada has with its Asian competitors in Canada.”
Nardelli’s right. So why doesn’t Chrysler just close up shop now and get it over with. No one outside of Auburn Hills honestly believes that the US needs or can support three automakers.
Minimum Bob, a legend in his own mind, ain’t there yet! Addressing Canada’s House of Commons is a rare privilege usually reserved for heads of state. Chrysler president Tom LaSorda made the comments to a parliamentary committee.
The CAW’s loud-mouthed intransigence, GM’s gamesmanship, and Chrysler’s arrogance are blowing up in their faces. The public is apoplectic GM workers didn’t waive all their special holidays, company funding for legal bills, child care and tuition before looking to taxpayers to ante up. Most employees don’t have such magnificent benefits. GM workers don’t contribute to their own pension plan, but want the government to cover the huge cash shortfall. Rationalize that to a taxpayer who has lost a third to half of his retirement nest egg!
Canadian public, media and political sentiment are overwhelmingly against an auto sector taxpayer bailout and forgiving Chrysler’s $1-billion tax arrears. Political careers are at risk!
It’s really bad time for Union workers to expect sympathy from the voters. 3 years ago they might have gotten some traction but now the general feeling is if we have to take a beating so should they.
Otherwise they will emerge as a cuddled class without having to deal with the real problems of lost retirement money, job loss, and a overall sense of disgust at what is going on.
Lewnza and Lasorda have known each other since they were kids. Both had union leader Dads. Some bad blood between the families.
Lewenza ‘incredibly angry’ over LaSorda threat
“CAW president Ken Lewenza said today he was “incredibly angry” over the tone of threats made by Chrysler LLC president Tom LaSorda that the company would pull up stakes in Canada if it didn’t win labour concessions, resolve a tax dispute with the Canadian government and also win US$2.3 billion in loans.
“In fact, angry doesn’t begin to describe it,” said Lewenza. “Chrysler has been incredibly successful and profitable in Canada. We’ve been told by the company year after year that we’ve profitable and efficient so to hear this now is discouraging.”
LaSorda made the remarks to a House of Commons finance committee.”
snip
http://www.windsorstar.com/Lewenza+incredibly+angry+over+LaSorda+threat/1381677/story.html
It’s pretty easy to know that GM didn’t go far enough with the CAW deal.
The union voted 87% in favour of the deal.
The vote should have been in the 55% range if the union was actually giving up enough to make a difference.
Read a nice editorial in today’s paper about Chrysler and the CAW. The MSM is taking the gloves off (finally) and calling it like the B&B have on this site for years.
In Benchmarking Studebaker, it’s finally out in the open that “Canada is not an uncompetitive manufacturing jurisdiction. Chrysler is an uncompetitive company with uncompetitive labour contracts in Canada and the U.S. It’s not an obligation of taxpayers to subsidize these contracts if management and the Canadian Auto Workers can’t bring costs into line with firms that do have competitive assembly operations in Canada and the U.S.”
Canada already has a very high level of personal taxation with little visible return, don’t blow my money on these clowns unless they can face reality.
Their case is so weak in that GM/Chrysler are transplants in Canada.
There are no truly domestic auto industry for Canada.
Canadians need to show their passports to enter the US. Thus American business are not domestic.
The facade of the GM Canada/CAW “Renegotiation” is finally spilling out….
Ford and ChryCo know without a doubt that what a lot of people were already thinking – GM and the CAW did was nothing more then collude in order to get Gov’t monies.
One hundred Canadian dollars buys you Seventy Eight United States dollars.If one pays a worker in Oshawa Canadian dollars to build a Camaro then sells said Camaro for American dollars,my uneducated brain says 22% difference eh?
wsn: Your remarks are flippant. The North American car market is very integrated; Canadians consider the big-3 to be domestic. The Autopact guaranteed blue-collar automotive jobs for Canadians but made it very difficult for a car company to have its head office in Canada. The Autopact may be dead now, but the fact remains that Canada “adopted” the US-based manufacturers as their own.
BTW, Canadians don’t have to have a passport to enter the US yet unless they’re travelling by air. The new “secure” drivers licences that most border provinces are adopting will continue to mean that Canadians won’t need a passport to enter the US by car when the new law comes into effect in June.
The Best and the Brightest don’t get it regarding union workers and their role in the Big Three Big Mess. You’ve got to stop thinking it’s still 1972, with vast crowds of “line monkeys” beside the drag chains slapping the cars together. It’s forty years later and the machines have taken over. Worker terminator bots. You’ve seen Minority Report where Tom Cruise escapes through the Lexus assembly plant. Nary an auto worker to be seen. That is not that far off.
The auto workers, unionised or not, can’t save anybody. Might as well ask Wagoner’s pet gerbils to chip in for the cause. It doesn’t matter. The workers left in Oshawa are all old. Next to zero child care since junior is 27 years old; not enough energy to seriously need legal aid any more.
The only thing that sticking it to the workers does is satisfy management’s blood lust. They just can’t let it go. They’ve won but they like the sound of dead bodies hitting the ground.
As for GM I doubt that Wagoner and the rest even knew about how the newest deal with the CAW came out before they read their morning paper. It just doesn’t matter.
Mike66Chryslers :
March 13th, 2009 at 4:36 pm
wsn: Your remarks are flippant. The North American car market is very integrated; Canadians consider the big-3 to be domestic. The Autopact guaranteed blue-collar automotive jobs for Canadians but made it very difficult for a car company to have its head office in Canada. The Autopact may be dead now, but the fact remains that Canada “adopted” the US-based manufacturers as their own.
The D3 paint themselves as domestically Canadian when asking for bailouts. Yet, in term of job preservation or management decisions, Canada is very foreign to the D3.
Show me one concrete example where “GM” treats “GM Canada” more domestically (more favorably) than, say, Saab of Sweden, Opel of Germany, or GM Mexico? Where is the “integration”? Huh? The whole “domestic” notion is nothing more than propaganda from D3 and CAW.
MikeInCanada:
“The facade of the GM Canada/CAW “Renegotiation” is finally spilling out….
Ford and ChryCo know without a doubt that what a lot of people were already thinking – GM and the CAW did was nothing more then collude in order to get Gov’t monies.”
Bingo. You hit the nail on the head. No more pattern agreements. Nardelli’s right. So why doesn’t GM just close up shop now and get it over with. No one outside of Detroit Free Press honestly believes that the US needs or can support three automakers.
wsn: I somewhat agree with your last post, but I’m not sure what you were really getting at with your earlier remarks.
After the Chrysler bombshell announcement, the Canadian federal finance minister made a statement to the effect that Tommy LaSorda is a “good Canadian”, and he didn’t believe that LaSorda would actually commit to blah blah blah, you get the idea. His statement was very nieve, but it exemplified my point that Canadians strongly relate to the big-3 as domestics.
The car companies will generally do whatever they think is going to help their bottom line, or allow them to survive at all, in the current context. This may include jettisoning their Canadian operations, which is the point you just made.
As for job preservation, the first counter-example that comes to mind is that Windsor is the last factory still manufacturing the Caravan. The two US plants that built it were closed, one of these as recently as last year. Oshawa got the new Chevy Camaro. Ford’s Oakville plant is the only one building the Edge. Before that it was the only Windstar plant. These are all newer models too, unlike Ford’s St.Thomas plant which is still churning out ye olde Panther platform cars. The present situation excepted, I think that the big-3 don’t care much whether plants are UAW or CAW when deciding their fates.
As you may know, auto manufacturers are required to separate domestic and foreign-produced cars into separate fleets for calculating CAFE averages. Canadian-assembled cars sold in the US are considered part of the domestic fleet for CAFE purposes. Korean-built Chevy Aveos are not.
The so called Domestic Vehicle plants here in Ontario are just left overs from the days of the long gone Auto Pack, the CAW still thinks its still in force by there recent comments, they are really only the UAW in another form and its too bad that other Canadian Based Unions never had the chance to organize these plants, due to rulings from the Canadian Labour Congress which is full of USA based Unions.
On June 1st you will need a Passport to entry the USA and not an enhanced Drivers Licence, no one in the USA has said this form of Licence would get you into the USA, only a Passport shows where you where born, where as a driver’s license does not, so word to the wise get your Passport, I have mine!
Well Ford has chimed in to back up Chrysler in saying the GM/CAW agreement is not good enough. According to Auto News:
Now Ford has piped up in Chrysler’s corner, saying “We believe the recently negotiated agreement between General Motors Canada and the Canadian Auto Workers will not keep Ford’s Canadian operations competitive in today’s global economy.”
I don’t understand why Canadian Union labor costs are so high compared to the US. I thought socialized medicine was supposed to be the big equalizer and save employers lots of money. So if the US gets it will our labor cost be as high as Canada’s?
So what’s Chrysler going to do? Shut down the plants that make two of the three product lines (the minivans and the 300/Charger/Challenger) that anyone cares about? Because that’s what shuttering the Canadian ops means.
Let’s see, that leaves… what? The Sebring/Avenger? Durango/Aspen? Calibre/Compass/Patriot? Other than the Wrangler and maybe the Ram, Chrysler Canada’s products are more or less the only ones that matter. LaSorda’s either bluffing, or Chrysler as a whole is done.
GM is another story: they don’t make dick in Canada that they couldn’t (and likely wont, or haven’t already decided to) shift elsewhere. Once the bloom is off the Camaro’s rose, I’d expect that to be about it for their Canadian ops.
I don’t understand why Canadian Union labor costs are so high compared to the US. I thought socialized medicine was supposed to be the big equalizer and save employers lots of money. So if the US gets it will our labor cost be as high as Canada’s?
There’s two reasons:
* Canada has a marginally higher tax rate and more stringent environmental laws than, say, the southern US.
* Canadian skilled labour costs more because, well, it’s generally better than what you’d get in right-to-work states in the lower US and Mexico. This is both a good and bad thing: good in that Canadian workers train up faster (Toyota found this out when it started comparing Kentucky’s step-up time versus Cambridge, Ontario’s), bad in that they demand more.
Socialized medicine helps a lot, but the reality is that, with the Canadian medical system rotting from the inside out (because it’s being turned into a nickel-and-dime hell like the US), the differences aren’t as extreme. The items that cost (drug, dental, vision, value-add hospital services) apply to both.