Fiat Could Cancel Deal With Chrysler if Labor Costs Aren't Cut

I hope fiat pulls out.

Chrysler needs to go.

"Fiat's
CEO, Sergio Marchionne has told the Globe and Mail and mail that the possible partnership with Chrysler
will succeed if the automaker cannot cut labor costs."

I think you need to edit this article. Proof read before you post. This sentence does not match up with the title.

Come on, you've never read the "Globe and Mail and Mail"? And Fiat just wants to make sure the workers keep their ridiculous pay.

Fiat (and everyone else in the world) needs to just say to the union workers "It's very simple -- either you keep your job and don't get paid as much, or you have no job at all. You've got 2 weeks to decide" and then walk away and wait for them to call.

My bet is that the unions refuse to negotiate and then we can all laugh when they're unemployed and they go on job interviews and the interviewer goes "Hm, I see here on your resume that you worked for Chrysler and made a massive amount of money and refused to take a pay cut and caused the company to go bankrupt.........sorry, you're not what we're looking for".

Guess what, after 25 years, i took a 20% pay cut, lost 401k matching funds, no bonuses, no pay for performances, forced vacations, lost all holiday time, lost all company sponcered dinners/holiday events, then forced to work more hours, heck - I even now have to empty my own trash and bring tissue's to work. But I'll do whatever it takes to keep my company alive through this economic mess, I'll do more to keep my job, and I'm not complaining (at least until the market improves :).

Why can't the unions do the same? They are spoiled. I say, let the company fail - reorganize - then accept resume's from these workers applying for jobs at an appropriate pay level. If that means a 40% pay difference from the same job, it's still better than being on the street and yet fair compared to the same job elsewhere.

I can understand how auto workers need regulatory agencies or safety laws, but the unions have grown way beyond this. Time to cut back like so many other americans have to do or close shop and get real like the rest of us.

Chrysler does need to go.

I mean seriously, who buys Chryslers except black guys [Chrysler 300].

The Sebring? Really... how dumb you gotta be. This cars a joke.
The PT Cruiser? O yea, thats gettting cut. O well...
The Aspen? Buy a Durango for cheaper!
The Town & Country? Its called a Dodge Caravan!

This brand has no point. Move Jeep to some other brand. That brand CAN'T go.

The only models Chrysler has that ANYBODY cares about are the 300, Caravan, Sprinter, Ram, Charger, Challenger & Jeep. MAYBE the Dakota and Viper can stay.

Am I missing anything else that should be there?

Anybody want to stick up for a Aspin, Sebring, Avenger, Nitro, Journey, Caliber?

BYE BYE CHRYSLER!

I agree with Totenglocke.Chapter 11 will be great for GM and Chrysler. It will bring their labor forces into line with the US Japanese manufacturers and give the UAW the shock of it's life. All this talk about Chapter 11 and bankruptcy is conditioning everyone so that when it happens everyone say's "great, it's the only way" and GM and Chrysler won't suffer as much as if it were a complete surprise. Believe me CHAPTER 11 WILL HAPPEN unless the UAW negotiates.
Chrysler and GM will rise from the ashes bigger and stronger than ever.Obama is not going to let these businesses disappear. He has already intimated this previously.Their manufacturing ability is a vital part of national security. It doesn't matter what brand of vehicle you drive they and the economy will all benefit from a leaner, stronger American auto industry.

To the MORONS who think we can afford to loose any of the big 3. The auto industry is all we have left we cannot allow them to go down.

To the MORONS who think we can afford to loose any of the big 3. The auto industry is all we have left! we cannot allow them to go down.
Yes, the union needs to take a pay cut. BUT the money the blue collar workers make is peanuts compared to the compansation of the white collar exects.
A good example of this is I work for a defense contractor. I recently compared my salary to the CEO's salary. it would take me 249 years to match him. Did I for get to mention the company lost 1 BILLION dollars this year!

To the MORON who cannot spell the word lose (loose) correctly. Perhaps you shouldn't be calling people morons.

I am glad to see I touched a nerve. because the people who say let the big 3 go down touch a nerve with me. the fact that you responded to me tells me you drive Jap Crap.

Most of the posts from the other members are saying let GM and Chrysler go bankrupt so they can be reorganized into a more efficient company and I'm all for that as well. As the article states, the unions are preventing Chrysler from getting a partnership with Fiat, which it needs so they can get money from the government, which they desperately need to stay afloat. All that Fiat is asking is that they come inline with the labor costs of their Japanese and German counterparts. Is that so unreasonable of a request, especially when the other option is the company going bankrupt and everyone possibly loosing there job? In these tough times people are going to need to make sacrifices and if you have a family to support making less money is a better option than making no money. Fiat's ready to walk, I'm certain there are other auto makers that would love to partnership with them so now isn't the time for the unions to stand their ground like this.

Just my two cents.

@ Steve

So you're saying "if you're not with me, you're against me." Trooper Bri pointed out you have a spelling error and you automatically assumed he (or she) drives a Jap Crap.

"Jap Crap?!" If you have any knowledge of the automotive world, you know Japanese-based and German-based products are on par with (dare I say superior to) American-based in quality and design. I'm not saying American cars and trucks are junks, the Detroit 3 have some very good products lately but perhaps it is too little too late. Remember, the Detroit 3 were in financial trouble years before the current economy meltdown.

Do you notice I use the word "Japanese-based?" Because nearly all Hondas and Toyotas sold in North American are build in North America (unless you consider Canada to be an enemy state). So these Jap Craps are made by your neighbors and countrymen. The only difference between the guys who work in Honda and the guys from GM is the Honda workers are not unionized, yet they enjoy just about the same job benefits and nowadays, a-heck-of-a-lot more job security.

As for CEOs making 249 times your salary, well, that's call capitialism (not communism or socialism). And most learned people understand this: one has to take the good with the bad. If you want to be a CEO pulling in millions in pay, you can also earn a master in business administration, maybe a law degree, before you venture out to start your own business. Oh yeah, you also need a lot of luck because most businesses are not successful and there are way more small business owners earning middle-class income than million-dollar-a-year CEOs.

So your company lost 1 billion last year, perhaps firing your CEO and replace him with 249 of you will save the company?

Please study economic 101 or at least read the front section of a reputable newspaper before you write again.

I hope Chrysler goes under, their restructuring plans fail, and all their UAW workers and families slowly starve to death.

@Steve: Enlighten me as to why I should stand up for UAW workers that aren't willing to negotiate to save their company?
While never a pleasant prospect, a slightly lower paying job vs no job at all because the company no longer exists seems like a pretty easy call to me.

Yeah, I said slightly lower paying. I did some digging, and 'Core' employees make about $51 an hour. Non core employees make about $28. This only accounts for wages and benefits to the employee. I couldn't find the breakdown of wages/benefits, but using the formula we use at my work, they make about $38 an hour, and the rest is benefits. Knowing a little about what GM gets for benefits however, I'd bet the hourly wage is closer to $30 / hour with 40% of the $51/hr being benefits.

This number doesn't factor in all of the unpaid liabilities that GM has to pay however. The pension fund, the unfunded portion of the pension fund, the job bank, child care allowance, education fund...etc... need to be paid too. Also, the UAW has the employees being paid while a plant is shut down over Christmas, etc...
This adds roughly another $20 an hour to the total, which gets us back to the $71 an hour that the press likes throwing around.

So at $30 an hour, 40 hour week, 48 weeks a year (which I assume is still high) = $58,000 a year. If you factor in all the other stuff (which the company has to pay anyway) that figure skyrockets to $140,000 a year.

I agree with DI, that we want an efficient company(s) out of this mess, not everyone out of work. Everyone needs to do their part, and there is no way to have a profitable business with the current UAW agreement.

It looks like my type-o is the subject for which I ask forgiveness.

The statement about Import Manufactures building cars here does not address the fact that the profit from those cars returns to the country of origin taking more money that the workers make.
I am not saying the UAW is not at fault. All automotive workers have to feel the pain. But do not cut the little man while leaving the big money alone.
As a regular reader of this site I do not agree that the imports are better.
The comment about 249 of me surely you do not believe that any person is worth that much money. How about this, if you are the CEO your total compensation will not exceed 100 times the salary of the lowest paid employee. So if the broom pusher makes 20,000 a year you make 2 million. more that enough.
My Knowledge of the auto world is everything I have read for the last 30 years as well as working in the field.
The with me or against me statement is true. If you want to succeed in a global economy you cannot keep having dollars fly out of this country.
Also remember the newspaper is writen by someone with an Opinion, so you are getting the info they want you to get.

@Steve

"The statement about Import Manufactures building cars here does not address the fact that the profit from those cars returns to the country of origin taking more money that the workers make."

Except that when you buy a Honda / Toyota / other Japanese car built in a US plant, the money spent goes to pay the American workers at that plant, the electricity bill to a US power company from that US plant, the US janitors at that US plant, the US managers at that US plant, the US suppliers providing materials to build cars at that US plant, the US salesmen at the US dealership where you bought the car, the US mechanics and lot techs at the US dealership where you bought the car, and probably others I'm forgetting.

Yes, SOME small amount of money from buying a US build Japanese brand car goes back to Japan. A whole lot more money though goes to paying American workers and American companies (who then pay more American workers).

I did some IT contracting last year to a Japanese based company that makes things like cupholders and dashboards for many different car companies. Are you saying that when you buy a car (regardless of if it's American, Japanese, Korean, German) that uses one of those companies cup holders that none of those American employees gets paid anything just because the owner of the company is from Japan? You obviously don't know much about business then.

In paragraph 2 you say one thing and in paragraph 4 you say the opposite.
why end it with the dig about business, I am not insulting your Intelligence why insult mine?

wise_caveman after rereading your post it occurred to me it was written from a rather Arrogant point of view. pitty

@ Steve

1) I did NOT contradict myself, I was pointing out YOUR point of view (that somehow American employees of Japanese owned companies don't get paid).

and

2) I wasn't insulting you, merely stating a fact since, again, you apparently think that American employees of Japanese owned businesses don't get paid .

Just because the firm that's making a profit is in country X doesn't mean that all of it's employees (and people that they contract with) in country Y don't get make a profit.

Also, the Japanese owners (and employees) of Japanese car companies that are in Japan use some of the money they make off of Americans buying Japanese cars to buy products made by American companies and exported to Japan. Imported goods normally cost more money (the UAW caused prices on American cars to go way out of whack with the norm) due to shipping costs and possible tariffs on imported goods. As a result, when people don't have as much money one of the first things they do is stop buying as many imported goods and buy domestic goods instead since the domestic goods are cheaper. Buying goods from another country actually helps your country sell more goods abroad.

@Steve

I apologize for insulting you; although you did call other posters morons for their opinions and stating your rather bias opinion that Japanese vehicles are crap.

Does a CEO deserve hundreds of times the salary of the lowest worker in the company? This is a question best left to some Nobel prize winning economists to answer. My point is, in our capitialist world, how much someone makes is not always tie to how hard he or she works. For example, do professional athletes, movie actors, etc. really deserve the millions they make? But I digress.

The facts are: (1) the Detroit 3 have more manufacturing capacity than sales, (2) UAW/CAW workers make more that non-unionized workers, (3) the GM and Chrysler need bailing out NOW.

GM and Chrysler need to do something drastic immediately. One of the things they can do is to reduce production costs. Okay some people say labour cost is only a small portion of the overall cost, but as the old saying goes: a penny saved is a penny earned. Not to mention the general (tax-paying) public is probably not happy with the union's position of entitlement.

I sorta agree that the Detroit 3 cannot die. Only because the shockwave from letting one of them die will cause suffering to other manufactures (US and Japanese alike) in the short term.

UAW/CAW are saying they don't need to cut wages because this is who they are. They simply cannot show weakness to their union members (not right away anyway). But the writing is on the wall. Chest-pounding used to work for the unions when times were good. Not now.

@Totenglocke

Steve was refering to me for ridiculing his lack of business sense.

Well, so long Fiat. You gotta have a bigger pair than that to play ball with these unions. The Big3 have been doing it for decades. Fiat lasted a few months, so the French surrendered again, lol.

Sorry Steve, you're wrong again. I've posted multiple times on TR that my current daily driver is a 96 Sable (194K on the ticker). Before that it was a Caprice and 89 Grand Prix.

I have owned a few Toyotas over the years, but not in a long time.

When you're done bickering with everyone else, i'll give you a 3'rd shot at being wrong since you're feeling spunky today.

@Sandman

Fiat did something the American companies never did -- stood up to the unions. Why you think rolling over and letting the unions get whatever they want and going into bankruptcy as a result is a good thing is beyond comprehension.....

If they were smart they would just go ask Benz.

@Steve:

"I am glad to see I touched a nerve." Yup, it's certainly easy to touch a nerve here with irrational, ill-conceived posts.

Good morning all,
now how can I stir the pot today?
First of all, Caveman well written. I agree with the points you have laid out. my Jap Crap remark is a term I have used since the 70's. I use it because I think political correctness is horse hocky and this is a strong subject with me.
Bri, I applaud you for crossing back from the "dark side".

HowieJ, Instead of throwing a barb, grow a set and state an opion.

Steve, if you're really so desperate for a conversation, there are 1-900 numbers you can call. Just a thought.

426Hemi no need for the 900 numbers, I have you.

That's strike 3 Steve, you're out.

I never said i was loyal to japanese cars. In fact, i don't pledge allegiance to any automaker. I buy what i like, or vehicles of opportunity. Simple as that.

So while my Toyotas (or any other daily drivers i've owned) were parked outside, i've always had American rolling stock parked in the garage. Kids leave their toys outside, i don't.

If you need to keep digging deeper on this topic, i highly recommend a sharper shovel.

They should retitle this post "Stupid Steve, the Pathetic Troll". Oh wait, that's exactly what he wants.

Andy, Caveman gave me an intelligent argument, the best you could do is a smart-a** remark. But oh wait that was your goal.

@ Totenglocke
By doing what exactly? Surrendering? In the end they fail because that are once again shut out of the largest car market. They didn't win shit, they lost out big time.

Fiat should probably walk on Chrysler and buy up Saturn or something off of GM. Would be a better fit anyway. I think Fiat is jumping on a bigger ship than they can handle with Chrysler.

Further to my comment above. The latest to hit the Bloomberg ticker is that GM might build cars in China. The sword rattling and scare tactics are at a fever pitch right now. When GM and Chrysler fall into Chapter 11 (note I said WHEN not IF) the UAW will live to regret it. But most of the workers will still have jobs, albeit at a lower rate of pay and benefits. I guess that's better than no job at all or seeing your job exported to China. Right now the UAW has some bargaining power. After Chapter 11 that disappears. The Fiat/Chrysler mix is a much better fit because unlike GM, Chrysler has no small autos and limited cash with which to develop them.

As long as the executives are demanding labor rates comparable with Japanese competition, they should have management pay comparable as well. Ford's new CEO got $28 million in less than a year, while Toyota's head earned an estimated $900k. Quite a disparity, and you can see money doesn't buy quality.

I think the UAW has done a poor job in negotiating contracts for a while. They will drive their employers out of business and then nobody will have a job. There are many other unions out there that negotiate for fair compensation based on the market considerations. I think it's too late for all the big 3 to survive, hopefully some new companies with new ideas will take their place.