Fiat to Chrysler: Cut costs or we walk


Liberalman
#1
http://business.theglobeandmail.com/servlet/story/RTGAM.20090414.wrfiat15/BNStory/Business/home

General Motors in America was given until June 1 to solve their problems or they will be forced in a bankruptcy by the American government and now Fiat is prepared to walk away from the Chrysler deal if the Canadian and American unions don’t lower their wages to at least twenty dollars an hour.

The American auto manufacturers have to be competitive with the overseas car companies.

When you look at it the government of the foreign car companies have always subsidized their national car companies because they did not want the evil three American auto manufacturers to flood the market with their cheap cars.

A lot of those foreign made cars were filling a niche market when they exported their products and with government subsidization you can say they were able to offer those cars sometimes at a cheaper rates.

I always thought that the Canadian and American governments had anti-dumping laws but they turned a blind eye because of their lucrative trade agreements they had with those countries.

The big three American auto giants did a good job until now but when the credit dried up because of government meddling the car companies are suffering.

Once the credit opens up then it’s business as usual.

Most of the foreign car companies have three or four models in their line of products and each American car company has a lot more than that so they should.

According to Mitt Romney a republican American president hopeful on Meet The Press said that labour accounts for only three percent of the car costs, which means other people are making money.

And if the labour reduction wages demands are met will this mean a cheaper car or will it mean a big payday for the shareowners and stakeholders.

How ironic that American President Obama who campaigned for more good paying jobs is ready to sacrifice jobs.

The messiah that was here to save the world and he is turning out to be another false profit.
 
TenPenny
#2
The 'big 3' have NOT done 'a good job until now'...GM has been running into the ground for about 10 years. Chrysler is such a basket case that Daimler sold it off for a pittance after struggling with it for a few years.

Government meddling has nothing to do with GM's inability to make itself competitive, it's more to do with their marketing - make 75 versions of the same vehicle, sell it under 5 different brand/model numbers, and hope people are willing to buy it.

Chrysler's quality has been horrible for years and years and years. People don't want to buy poorly built crap, when they have an alternative.

Ford was on the verge of bankruptcy a few years ago, but is likely to emerge as the strongest of the three.

Did you notice in the GM restructing plan, there was a chart that showed that the typical North American built Chrysler has 76% content from North America; the typical North American built Toyota has 75%. In other words, they've got the same amount of 'local' content, but one will last 2years, one will last 10.

Which one would you buy?
 
dumpthemonarchy
#3
If FIAT, formerly nicknamed Fix It Again Tony, says Chrysler is muck, then it is muck. NA automakers can't make money off small cars which are profitable to Asian automakers who have cut their costs to the bone, which is why Detroit is on the ropes.

Japan has so many automakers, Toyota, Mazda, Suzuki, Nissan, Honda, Mitsubishi; in Korea there are GM Daewoo, Hyundai and Kia in Korea, and they all make money. Then India and China are looming. The Asian automotive tidal wave is here. Surf's up in Detroit and Windsor!
 
Trex
#4
Quote: Originally Posted by Liberalman View Post

http://business.theglobeandmail.com/servlet/story/RTGAM.20090414.wrfiat15/BNStory/Business/home

General Motors in America was given until June 1 to solve their problems or they will be forced in a bankruptcy by the American government and now Fiat is prepared to walk away from the Chrysler deal if the Canadian and American unions don’t lower their wages to at least twenty dollars an hour.

The American auto manufacturers have to be competitive with the overseas car companies.

When you look at it the government of the foreign car companies have always subsidized their national car companies because they did not want the evil three American auto manufacturers to flood the market with their cheap cars.

A lot of those foreign made cars were filling a niche market when they exported their products and with government subsidization you can say they were able to offer those cars sometimes at a cheaper rates.

I always thought that the Canadian and American governments had anti-dumping laws but they turned a blind eye because of their lucrative trade agreements they had with those countries.

The big three American auto giants did a good job until now but when the credit dried up because of government meddling the car companies are suffering.

Once the credit opens up then it’s business as usual.

Most of the foreign car companies have three or four models in their line of products and each American car company has a lot more than that so they should.

According to Mitt Romney a republican American president hopeful on Meet The Press said that labour accounts for only three percent of the car costs, which means other people are making money.

And if the labour reduction wages demands are met will this mean a cheaper car or will it mean a big payday for the shareowners and stakeholders.

How ironic that American President Obama who campaigned for more good paying jobs is ready to sacrifice jobs.

The messiah that was here to save the world and he is turning out to be another false profit.

People in Canada and US of A obviously would have preffered to buy North American cars if possible.
However time and time again North Americans were forced to face the reality that American big three cars were of poor to mediocre manufactor.
Nobody now disputes Toyota for years has had better engineering, reliability or fit and finish.
Just read all the backdated JD Powers and consumer reports.

The North American unions did a great job at extracting every last nickle in wages and benifits that they could.
And lets face it, that is the unions main job.
And finally the whole house of cards came crashing down, too many shoddy overpriced cars trying to compete with a better product.

Cereberus is purchased Chrysler/Dodge for nickles on the dollar.
They thought they scored a great, deeply discounted car company.
By and large they got crap and debt.
Cereberus has gobs and gobs of cash and they are a privately owned investment group.
If they wont fund Chrysler why would taxpayers?
And why should Canadians bail out American companies in the first place?
Chrysler is toast.
GM gets a quick rinse American bankruptcy.
And Ford keeps on chugging.

Trex
 
darkbeaver
#5
Quote: Originally Posted by Trex View Post

People in Canada and US of A obviously would have preffered to buy North American cars if possible.
However time and time again North Americans were forced to face the reality that American big three cars were of poor to mediocre manufactor.
Nobody now disputes Toyota for years has had better engineering, reliability or fit and finish.
Just read all the backdated JD Powers and consumer reports.

The North American unions did a great job at extracting every last nickle in wages and benifits that they could.
And lets face it, that is the unions main job.
And finally the whole house of cards came crashing down, too many shoddy overpriced cars trying to compete with a better product.


Cereberus is purchased Chrysler/Dodge for nickles on the dollar.
They thought they scored a great, deeply discounted car company.
By and large they got crap and debt.
Cereberus has gobs and gobs of cash and they are a privately owned investment group.
If they wont fund Chrysler why would taxpayers?
And why should Canadians bail out American companies in the first place?
Chrysler is toast.
GM gets a quick rinse American bankruptcy.
And Ford keeps on chugging.

Trex


So you would eliminate unions which will and has driven wages down. This of course is puts NA manufactured products further from the reach of consumers. It does highlight the poverty of thought of the right and the very short list of options available to save capitalists and capitalism. If consummers don't earn money they cannot spend it. Oh, that short list, it's global war, there isn't any other option for capitalists of capitalism.
Last edited by darkbeaver; Apr 16th, 2009 at 09:38 AM..
 
Ron in Regina
#6
If CAW doesn't bent, then Chrysler doesn't get Gov't $$$ in Canada 'cuz
Fiat walks away from a merger with Chrysler. Chrysler then goes under in
Canada.

Canada demands repayment of funds already passed out. Revenue Canada
seizes all assets on Canadian soil due to the back-taxes owed in the
neighborhood of a Billion dollars....

....and Fiat purchases these assets for pennies on the dollar from the
Canadian Government, and sets up shop here with the CAW on the outside
of the fence looking in. Fiat hires people (outside of the CAW) to build Fiat's
in Canada. Life goes on. Fiat then pays taxes to the Canadian Government,
as do their employees.
_______________________
 
darkbeaver
#7
Great, the wageless economy. Ask a capitalist where the low limit of bending is. They'll tell you there isn't one and that's the way they like it. I know lots of people are tired of bending and tired of listening to the suits. Things will be different soon. Where a tie you're sure to die. Many people refuse to see the writing on the wall most of all those clinging to the notion of membership in the capitalists ruling cliques. Them days are so over.
 
Ron in Regina
#8
That's my prediction, not my desire. If the current winds that're
blowing don't change direction, that's what I can envision
happening.
 
#juan
#9
I can't for the life of me see how the North American automakers can be saved. I can't think of one vehicle made by a North American company that I would want to buy. I can't see any American vehicle that even comes close to the quality of the Honda Accord, or the Toyota Camry, or the Nissan Altima. Hell, the Hyundais are as good as any North American vehicle and they cost half as much and have a better warrantee. I haven't bought a North American car for years and my last experience does not encourage me to buy another. Why are we even thinking about bailing the "big three" out? It seems to me to be just putting off the inevitable.
 
Ron in Regina
#10
Quote: Originally Posted by Ron in Regina View Post

If CAW doesn't bent, then Chrysler doesn't get Gov't $$$ in Canada 'cuz
Fiat walks away from a merger with Chrysler. Chrysler then goes under in
Canada.

Canada demands repayment of funds already passed out. Revenue Canada
seizes all assets on Canadian soil due to the back-taxes owed in the
neighborhood of a Billion dollars....

....and Fiat purchases these assets for pennies on the dollar from the
Canadian Government, and sets up shop here with the CAW on the outside
of the fence looking in. Fiat hires people (outside of the CAW) to build Fiat's
in Canada. Life goes on. Fiat then pays taxes to the Canadian Government,
as do their employees.
_______________________


Clement takes tough line with Chrysler union


By Nicolas Van Praet, Financial Post April 16, 2009 12:05 PM
Source: Clement takes tough line with Chrysler union

The Canadian government is hardening its stance towards organized labour, saying
it will not use taxpayer dollars to support Chrysler LLC unless the Canadian Auto
Workers makes significant concessions the union has already rejected .

“The CAW has to recognize that in order for Chrysler to survive in this country,
Chrysler has to be competitive in the Canadian market,” Mr. Clement said
Thursday. “If there’s no [labour] deal in place, there’s no deal with the
Canadian government.”

Chrysler wants the union to lower all-in pay and benefits costs from the current
range of about $76 to $57, which is what Toyota Motor Corp. pays its Canadian
factory workers, according to sources familiar with the discussions. The CAW is
adamant that it will not make up the $19 per hour gap but has said it is willing to
negotiate.

The Canadian government has pledged $1-billion to Chrysler to help it stabilize its
two manufacturing plants in Canada and restructure its business. Ottawa will recall
the loans if Chrysler fails to strike a new labour deal by April 30 as part of a
planned commercial partnership with Italian automaker Fiat SpA, Mr. Clement told
reporters in Toronto Thursday.

Fiat, seeking to steer Chrysler to a new life through an initial 20% investment in
the automaker, said this week that unions in both the United States and Canada
must lower costs more or it will walk away from the alliance.

“With April 30 looming very closely on the horizon, the CAW has to do its part,”
Mr. Clement said. “This is not an easy thing, but the alternative is, there’s no deal
in place. And if there’s no deal in place, there will not be long-term funding
arrangements with the government of Canada, and in fact we have the right to
call our loans.”

The CAW wants to offer Chrysler a variation of the new labour deal it has already
struck with General Motors Corp. through a system known as patttern bargaining.
Industry sources estimate the savings of that deal at $7.25 per hour, short of what
Chrysler and Ford Motor Co. need to justify building cars in Canada.

The CAW has always insisted on pattern bargaining as a way to offer roughly the
same labour deal to all three Detroit automakers and prevent one from having an
advantage over the other. But Mr. Clement said pattern bargaining is dead.

“We’re beyond that now. It’s about competitiveness,” he said. “I am not
satisfied.”

GM, which has been promised $3-billion in federal and provincial aid, will also have
to renegotiate its contract with the CAW, Mr. Clement said. Asked if the
government would be willing to take an equity stake in the automakers to protect
its investment, he said “Everything is on the table.” No government funds have yet
flowed to GM.

“Compromises have to be made” on labour contracts, said Rob Wildeboer,
executive chairman of Canadian auto supplier Martinrea International Inc., whose
workforce is partly unionized.

“The key for the supply base is that we get paid,” Mr. Wildeboer said when asked
about a potential Chrysler or GM bankruptcy protection filing. He said he believes
critical suppliers, comprising the vast majority of suppliers, will be paid in a
creditor protection situation.

“In the automotive industry, all suppliers are critical... You can't ship a car without
a gas pedal.” The key issue is what the court decides to do with any oustanding
receivables owing before the filing is made, he said.

Ken Lewenza, CAW President, said Wednesday that given all the billions of debt and
complicated talks Chrysler is having with lenders and other stakeholders, labour
alone would not make or break the Chrysler-Fiat deal. He said the CAW expects
to resume bargaining with Chrysler on Monday.

Mr. Clement was in Toronto to announce details of a new $145-million five-year
auto research fund, designed to support research and development in alternative
fuels and other technology. The fund’s project office has been set up and has
begun working with potential applicants.
___________________________
 
dumpthemonarchy
#11
In our so called "free market capitalist system", we had the media, unions, provincial, municipal, state and federal gov'ts all in cahoots to support the auto industry. Then quality slid and costs rose. Any job was a good job. A system about as efficient as the federal gov't's accounting methods. They say the ruling class is the last to know the revolution has begun.

It's all going to crater big time. The automotive asteroid is going to hit.
 
#juan
#12
$2137.50 per week is not enough? That is over a hundred and ten thou a year in an industry that is racing down the toilet. These people don't deserve this kind of money, especially when nobody wants the product they are producing.

A good plumber gets about $22.00 per hour. They can take that or leave it.
 
JLM
#13
Quote: Originally Posted by #juan View Post

$2137.50 per week is not enough? That is over a hundred and ten thou a year in an industry that is racing down the toilet. These people don't deserve this kind of money, especially when nobody wants the product they are producing.

A good plumber gets about $22.00 per hour. They can take that or leave it.

Exactly.
 
SirJosephPorter
#14
What happens between FIAT, Chrysler CAW is up to them and nobody’s business. Government should not give money to Chrysler unless there is a guarantee that it is going to survive.

How they guarantee the survival of Chrysler is upto FIAT, Chrysler and CAW. Let them negotiate wages down to 57$ an hours or up to 100 $ an hour. If government is going to pay Chrysler money (something which I do not really support), there must be ironclad guarantee that Chrysler will survive.

If FIAT negotiations break down let Chrysler declare bankruptcy. Then all the contracts are automatically null and void, everybody is fired, union workers and the management alike. Then some of them can be rehired at reduced salaries, wages and benefits, something the company can afford.

But it is all private enterprise and nobody’s business. Government should not get involved unless survival of Chrysler is guaranteed.
 
petterhny
#15
Earlier in the discussion Liberalman mensioned:
Quote:

When you look at it the government of the foreign car companies have always subsidized their national car companies because they did not want the evil three American auto manufacturers to flood the market with their cheap cars.

This is not so much true as you may think. The overseas markets have never been suitable for the Big Three. When you go to Europe or Asia you will be suprized by the number of non-american cars, as it should. This is partly because of the size of the cars which is a problem in countries like Japan, and the huge engines which needs a lot of expensive gas and it is a fact that you have to pay over $80k to get the same quality as a $50k Volkswagen or Toyota. As Japanese and European car manufacterors are now developing lighter and cleaner cars, it is not less than logical that they sell better.
 
Colpy
#16
(sigh)

i remember when FIAT meant Feeble Italian Attempt at Transportation.

(sigh)
 
YukonJack
#17
Why is a GM/Chrysler/Ford assembly line worker makes more than a 15 year old McDonald part-timer? What makes him/her think he/she deserves more?

Not better educated. Not harder worker.

And certainly not smarter. Right now it seems that they would rather not have job at all, than earn their rightful wages, the wages that their capabilities, education, industriousness, diligence and ambition qualifies them for.

A bit less than the kids at McDonald.
 
JLM
#18
I saw the autoworkers on the news tonight and they were pretty disgrunted about some letter they got asking for concessions. What I'd like to know before making a judgment is exactly what hourly wage does management and the gov't. want them cut back to? If it's less than $20 an hour I am on the worker's side. If it's more than $25 an hour I have absolutely no pity for them and see them as just a bunch of friggin whiners, while others are doing tougher jobs at 1/3 what they are being paid. I'd like to see this as a country where everyone can afford three nourishing meals every day and a dry warm shelter, adequate medical care and decent clothes to wear, before a select few can drive B.M.W.s and fly off to exotic lands for annual holidays. But I want to see EVERYONE work for what they get, unless they are retired.
 
JLM
#19
Quote: Originally Posted by YukonJack View Post

Why is a GM/Chrysler/Ford assembly line worker makes more than a 15 year old McDonald part-timer? What makes him/her think he/she deserves more?

Not better educated. Not harder worker.

And certainly not smarter. Right now it seems that they would rather not have job at all, than earn their rightful wages, the wages that their capabilities, education, industriousness, diligence and ambition qualifies them for.

A bit less than the kids at McDonald.

I'm inclined to agree with you, Y.J. (and it wasn't even a frosty Friday- just Friday)
 
#juan
#20
Quote: Originally Posted by Colpy View Post

(sigh)

i remember when FIAT meant Feeble Italian Attempt at Transportation.

(sigh)

Actually it stands for Fabbrica Italiana Automobili Torino and they haven't sold in North America for years, but I remember on the Autostrada that every Italian drove his FIAT 600 at the red line with one foot on the gas and one hand on the horn.
 
talloola
#21
Quote: Originally Posted by #juan View Post

$2137.50 per week is not enough? That is over a hundred and ten thou a year in an industry that is racing down the toilet. These people don't deserve this kind of money, especially when nobody wants the product they are producing.

A good plumber gets about $22.00 per hour. They can take that or leave it.

I'll have to get the number of that plumber.
 
SirJosephPorter
#22
Quote: Originally Posted by Colpy View Post

(sigh)

i remember when FIAT meant Feeble Italian Attempt at Transportation.

(sigh)

That may be, but did you see their latest results? Their sales (or revenues) were up a staggering 17 or 18% in these hard economic times. Clearly they are doing something right. Chrysler does need somebody like FIAT to bail them out.

And Chrysler needs FIAT, FIAT does not need Chrysler. If their terms re not met, FIAT will simply walk away. So the workers really have a dilemma. Either accept FIAT’s terms and take a huge pay cut, or reject their terms, force Chrysler into bankruptcy (and as I said before, no way government should shell out even a penny if Chrysler’s survival is not guaranteed) and get rehired at reduced wages, again taking a huge pay cut.

It is a Hobson’s choice and I don’t envy them their position. But then perhaps they did negotiate excessive wages and benefits in the past years, more than the company could afford. That may have played a part in bringing Chrysler where it is today (though that by no means was the sole reason).
 
CDNBear
#23
Quote: Originally Posted by darkbeaver View Post

Great, the wageless economy. Ask a capitalist where the low limit of bending is. They'll tell you there isn't one and that's the way they like it. I know lots of people are tired of bending and tired of listening to the suits. Things will be different soon. Where a tie you're sure to die. Many people refuse to see the writing on the wall most of all those clinging to the notion of membership in the capitalists ruling cliques. Them days are so over.

You think Unions aren't Capitalist?

You need to wake up.

Unions are all about MONEY, the altruism of the early days of the Union are long gone. Honda, Toyota, Kumi, etc all produce higher quality cars, with greater efficiency. While the typical GM worker gets to read a couple papers a day, the average Honda line worker, doesn't have the chance. They actually work for their Union comparable wages and benefits.

Your BS is proven wrong, by the very fact that the Honda, Toyota and Kumi were thriving while the big three were diving...what's the major difference there DB...the Unions.

Only Ford saw the writing on the wall and began restructuring. Ford began courting the Japanese automakers in Canada. They sent representatives to the Honda Group to watch and learn. They implemented many of the 5S and LEAN manufacturing ideologies that the Japanese companies use to make a high quality car, efficiently.

The Union has tried and failed to penetrate the Japanese automakers in Canada, what does that tell you about the working conditions? The wages? The fact that the Japanese companies have no walls between management and the "Associates". No employees at Honda, Toyota, kumi...

I realise a lot of what the management puts forward for the average associate is window dressing, but it still works. Look at who's not at the trough.

Quote: Originally Posted by #juan View Post

$2137.50 per week is not enough? That is over a hundred and ten thou a year in an industry that is racing down the toilet. These people don't deserve this kind of money, especially when nobody wants the product they are producing.

Especially when you actually look at what they poses and call "skills". They aren't skilled labour. They're glorified labourers.

Quote:

A good plumber gets about $22.00 per hour. They can take that or leave it.

That seems a little low, hence why I do my own, lol...but I get the jist and concur.
Quote: Originally Posted by SirJosephPorter View Post

It is a Hobson’s choice and I don’t envy them their position. But then perhaps they did negotiate excessive wages and benefits in the past years, more than the company could afford. That may have played a part in bringing Chrysler where it is today (though that by no means was the sole reason).

Chrysler, GM, Ford...they all paid the Unions extortionist wages to get them back to building cars.
 
JLM
#24
Quote: Originally Posted by talloola View Post

I'll have to get the number of that plumber.

That would be what the plumber gets to keep as income after all expenses are paid. I just had a plumber in a couple of weeks ago. I was very happy (had him before), he's a hard worker and does a good job. He charged me (senior's rate) $55 an hour. Bet you wouldn't get that in Victoria or VAncouver.
 
#juan
#25
I picked the $22.00 off a chart for average wages. If you hire a plumbing company to do work on your house the charge out rate is probably going to be around sixty bucks an hour but the plumber who does the work likely won't get that unless he is a private contractor.
 
JLM
#26
Quote: Originally Posted by #juan View Post

I picked the $22.00 off a chart for average wages. If you hire a plumbing company to do work on your house the charge out rate is probably going to be around sixty bucks an hour but the plumber who does the work likely won't get that unless he is a private contractor.

Absolutely- if he's lucky, their vehicle is probably worth to $100 grand, God knows what the tool cost and then there's thousands of $ worth of inventory he has to have on hand, not to mention the fact he was making very little money while going to school and all the education expenses. MOst people don't appreciate these things- they just think whatever money goes in his pocket is his. Now guys screwing door handles on car door don't need $60 an hour, they learned on the job and the company supplies the tools- their biggest work related expense is probably a doughnut at coffee break.
 
coldstream
#27
The only way to make Chrysler and GM.. and ultimately Ford viable will be to re-organize them in North America as soley retail operations, selling products produced in Bangladesh or Viet Nam, or Latin American Maquilladora 'Free Trade Zones' (China is already too expensive), without any restriction or tariffs on imports.

But.. if we stop manufacturing things, nobody, except bankers and those involved in moving capital around the globe will be able to afford them.

The only hope of preventing a complete collapse of the North American economy, of which automobiles are a lynchpin, is to ditch Free Trade... and the corresponding Monetarist policies of unrestricted currency trading and movement of investment capital.
 
CDNBear
#28
Quote: Originally Posted by coldstream View Post

The only way to make Chrysler and GM.. and ultimately Ford viable will be to re-organize them in North America as soley retail operations, selling products produced in Bangladesh or Viet Nam, or Latin American Maquilladora 'Free Trade Zones' (China is already too expensive), without any restriction or tariffs on imports.

But.. if we stop manufacturing things, nobody, except bankers and those involved in moving capital around the globe will be able to afford them.

The only hope of preventing a complete collapse of the North American economy, of which automobiles are a lynchpin, is to ditch Free Trade.

If this were true, Honda, Toyota and Kumi wouldn't be building vehicles here at comparable prices, paying comparable wages and offering comparable benefits.
 
coldstream
#29
Quote: Originally Posted by CDNBear View Post

If this were true, Honda, Toyota and Kumi wouldn't be building vehicles here at comparable prices, paying comparable wages and offering comparable benefits.


It's a downward spiral, an economic death spiral we are in. Honda, Toyota will ultimately be forced to abandon their facilities here, but not before they can no longer intimidate labour to work for less than the minimum wage.. but by that time the market for their product will have collapsed as well.
 
CDNBear
#30
Quote: Originally Posted by coldstream View Post

It's a downward spiral, an economic death spiral we are in.

OooooK...

Quote:

Honda, Toyota will ultimately be forced to abandon their facilities here, but not before they can no longer intimidate labour to work for less than the minimum wage.

Ummm, OoooK. You do realise that Honda, Toyota and Kumi pay their Canadian autoworkers comparable wages to the big three right?

Quote:

but by that time the market for their product will have collapsed as well.

Reeeaaally?

Fun, out of the major auto manufacturers in Canada, the only three not projecting huge losses are Honda, Toyota and Kumi. Nor are they, along with Ford, begging the general public to bail them out.

Funny how everything you've said in this thread is the exact opposite of reality.
 

Similar Threads

30
What movie did you get up and walk out of?
by unclepercy | Jan 25th, 2006
6
Walk in the park ...
by Cosmo | Jun 23rd, 2005