Bloomberg reports that if Chrysler fails to secure a deal with Fiat and rapidly exit Chapter 11, some 38,500 jobs could be lost in a liquidation. According to one of Chrysler’s lawyers, anyway. But an Automotive News [sub] story says that, in addition to Chrysler’s plant idling during bankruptcy, no fewer than eight of its factories will be permanently closed by December 2010. The best part? According to Chrysler sources, the proposed Fiat deal would allow ChryCo “to retain substantially all our employees.” Huh? “Any employee displaced by the bankruptcy will be given an opportunity at other Chrysler facilities,” explains spokeswoman Dianna Gutierrez. Not only did Chrysler deny that shutting eight plants would cause the negative impacts (job loss) that government billions were supposed to prevent, it went as far to suggest that the Fiat alliance would add about 5,000 employees to the payroll. In fact, if you believe the Pentastar line, there are only two victims in in the Chrysler plan: Sebring and Avenger.

Read More >

NPR’s Steve Inskeep: “You have no intent, and, in fact, not even the ability to remain major shareholders of two major auto companies?”

UAW President Ron Gettelfinger: “That’s correct. We do not have the ability because of the need for the cash in the VEBA.”

Inskeep: “Are you optimistic that Chrysler is going to emerge from bankruptcy in a long-term viable form?

Gettelfinger: “First of all, we did everything we possibly could to keep Chrysler from filing for bankruptcy. We did our part, and we’re not responsible for them being in bankruptcy . . . ”

Welcome to the new Chrysler ownership. And unlike Cerberus they’re not even pretending they’re in it for the long haul. But to whom will they sell? Listen to the whole story here.

Reuters reports that the UAW membership has “overwhelmingly approved” its deal with Chrysler, paving the way for union ownership of the firm. So it’s fair to say that Obama’s “what we’ve seen is the unions have made enormous sacrifices on top of sacrifices that they had previously made” line sent the right message?

It’s getting to be sports metaphor time for the ChryCo deal: the fourth quarter, the ninth inning, the obese lady’s vocal warm-ups. Automotive News [sub] quotes a White House spokesperson as saying “hurdles still remain, but we remain optimistic and hopeful that something in the next many hours will get done that will provide a pathway for Chrysler’s viability without continued government assistance.” Maybe the White House should read more news. And not just assurances from the UAW’s Ron Gettelfinger who sounds downright thrilled at the possibility of seeing his union gain a controlling stake in ChryCo. No, The Detroit News points out that a grassroots UAW effort to scuttle the deal (which must still be ratified by a full union vote) is underway. “It’s time to stop the concessions. Send them back to the table. We need a week to see the agreement before the vote. Jeep workers should be allowed to vote. Vote no,” runs a letter being circulated amongst UAW workers. Why so confrontational? The (proposed) lack of confrontation.

Read More >

According to Automotive News [sub], the United Auto Workers (UAW) agreement with Chrysler/Fiat would deliver unto the union a 55 percent share of the reborn Italian – American automaker. As in the proposed (but doomed) GM bondholder offer, ChryCo union workers will forego a multi-billion dollar payment into their Voluntary Employment Beneficiary Association (VEBA) health care fund in exchange for the equity stake. In Chrysler’s case, $6 billion buys them controlling interest in Chrysler. That’s all kind of nuts on all kinds of levels. And as we’re in tail wagging the dog territory . . .

Read More >

Pop quiz time: how many viability schemes has GM touted since it began asking for bailout bucks? Including today’s announcements (actual plan not yet released) General Motors has submitted no fewer than three new business models since it began receiving Treasury funds in mid-December. And that doesn’t even include the first two “requests” which were rejected by Congress before GM cut out the middlemen and started dealing directly with the guys who print the money. The progression of this parade of plans illustrates a single major theme: the slow, reluctant acceptance of some approximation of reality. Which includes confronting the fact that GM’s bloated payroll trades off with its viability. The Detroit News reports that GM now understands that it pays 21,000 more employees than it can support, and that these positions will be terminated. That’s 7,000 more job cuts than the last (February) plan called for. The December plan (now lost to the GM memory hole, but hosted at TTAC here (PDF)) didn’t call for job cuts at all because the bailout was all about saving jobs back in those days. The cuts amount to a 34 percent decrease in hourly employment, with plans to stabilize employment levels at 38,000 by 2011. GM’s hourly labor costs will drop from $7.6 billion in 2008 to $5 billion in 2010, as GM seeks to “lower its break-even point” according to CEO Fritz Henderson.

“The UAW said it reached a deal with Fiat and the U.S. government.” Oops! I forgot the word “also”. I wonder how that happened. Because everyone knows Chrysler’s management is large and in charge, despite the fact that its existence depends entirely on the largesse of the American taxpayer and the success of a cockamamie scheme hatched by a struggling Italian automaker and an unelected quango known as The Presidential Task Force on Automobiles. The Detroit News provides the details of the agreement, which show that the UAW—wait . . . No they don’t. Motown’s hometown paper doesn’t provide any details of the union – Chrysler – Fiat – PTFOA agreement. All we get is this: “The settlement agreement, subject to ratification by UAW members at Chrysler, includes a revision of the 2007 health care deal, and members must approve the deal by Wednesday.” At best, we can assume some sort of health care obligation for equity swap involved. At worst, Uncle Sam will guarantee the union’s health care provisions, regardless of Chrysler’s ultimate fate (i.e., liquidation.) As the DetN recognizes, whatever the fine print, the union deal paves the way for American Leyland.

Read More >

Last night, Chrysler announced it had broken its deadlock with the Canadian Auto Workers (CAW). The press release couldn’t have been more vague if it had simply show a picture of a chocolate pavlova. Here’s the “we won’t show you the money” shot from Tom LaSorda, Vice Chairman and Co-President: 

“We are extremely grateful to the CAW leadership and to its hard-working members for their openness in this challenging environment to create a new strategy that will lead this company on a path to success. We also want to recognize the Canadian Federal and Ontario governments for their energy and efforts in helping to move this great Company forward.” 

Read More >

The following email just came over the TTAC transom. Negotiations between Chrysler and the Canadian Auto Workers have broken down three days ahead of Canada’s bailout deadline and Uncle Sam’s defunct deadline for union concessions. Chrysler has already threatened to pull out of Canada. Given this stalemate, and the Presidential Task Force on Automobile’s determination to keep the zombie automaker in business, they just might.

Chrysler LLC Statement Regarding CAW Talks Attributed to Al Iacobelli, Chief Bargainer:

“We all recognize that we are in unprecedented times as it relates to the global economy and current financial crisis, which has a direct impact on the automotive industry. After several days of bargaining in good faith, Chrysler and the CAW have not reached an agreement that closes the competitive gap with other automobile manufacturers in Canada, to ensure Chrysler’s immediate viability.

Read More >

Dagens Industri has published a letter from Saab’s union bosses which accuses GM of playing silly buggers with the brand’s accounts. As Saabs United says, “The report tends to support the idea that GM are handy at shuffling results around to suit their reporting needs.” [Thanks for the TTAC translation to commentator Naser Rouholamin]

Recently, the future of SAAB has been the subject of many allegations and much debate. Specifically we are thinking about such claims as “using tax money for playing monopoly”, or “SAAB has always made a loss, hence there is no point in saving it now”.

In order to rebuke the latter claim one must realise that not even GM would have kept Saab afloat the last 20 years from pure goodwill.

Read More >

The Freep reports that UAW president Ron Gettelfinger will not seek re-election when his term expires in 2010. The move is not unexpected as the UAW traditionally does not allow re-elections after candidates reach the age of 65. Gettelfinger will continue to lead the UAW negotiations with the Detroit automakers through the union’s conference in June 2010. “The minute that’s over, I’m done,” says Gettelfinger. And his timing looks to be impeccable (given the situation, natch). Though Gettelfinger oversaw the 2007 labor negotiations which introduced VEBA and two-tier wages, UAW wages will not reach parity with the transplants until 2011 at the soonest. Which means Gettelfinger will not technically be in charge at the exact moment the UAW officially ceases to have any relevance.

The Star reports that Magna International is closing its New York state New Process Gear plant after 52 percent of the plant’s union workers rejected a 20 percent wage reduction. The haircut would have pegged hourly salary at $16, and stipulated that the factory had to break even by July 1 (good luck with that). “The plant, which employs about 1,400 people, makes transfer cases to switch power from two- to four-wheel drive vehicles.” Make that made. Magna’s statement after the jump [thanks to cnyguy and Geo. Levecque for the links].

Read More >

“Dangerous innuendo” is CAW Prez Ken Lawenza’s sultry summary of Chrysler’s plan to interruptus its Canadian operations if labor won’t agree to further concessions, reports Bloomberg. Chrysler is holding out for wage and benefit concessions that are “considerably larger” than those given to GM. The current GM agreement, when applied to Chrysler, cuts just $7.25 an hour Canadian from the company’s labor costs, according to a document obtained by Bloomberg. The same document reportedly shows that Chrysler requires $11.75 Canadian an hour in additional savings to be competitive. Meanwhile, Automotive News [sub] reports that GM is playing a similar game in its UAW negotiations. CEO Rick Wagoner says Ford’s agreement with the UAW “does not meet our needs” and that GM is working with the UAW to “do something different.” But despite the bloodthirsty negotiations, all three Detroit automakers are standing by their union allies in DC and on the pages of the Freep, calling for an American cash-for-clunker program. Because, hey, even Malaysia is doing it, according to Ward’s [sub].

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.”

Senator Corker must be so proud of himself. He held Ford’s feet to the fire . . . oh, no, wait, Ford didn’t bother with that meeting. Anyway, today Ford is crowing [via AP] that its revised UAW contract gets close enough to wage parity with the transplants to call it a done deal. Which is kind of strange, because Ford’s accounting puts the all-in costs under the newest deal at $55/hour compared to the $48-$49 number people toss around for the transplants. Hmmm, maybe I’ll try that kind of “close enough” math when I pay my bills. Ford’s spin-meisters could have pointed out that nobody outside the transplants really knows what they are paying, but they didn’t. Absent a published union contract, all we can do is guess.

Read More >