Saturday, March 28, 2009

So long, Chrysler

The big drama in Canadian business this weekend revolves around down-to-the-wire negotiations between Chrysler Canada and the Canadian Auto Workers, the union which represents its workers.

Long story short, the Canadian government, as a precondition of providing bailout funds to the major domestic auto manufacturers, is insisting they renegotiate their contracts with the union to slash labour costs. Canadian taxpayers, it seems, aren't all that willing to fork over billions of dollars to save companies too wimpy to take on the unions.

The government's saying no funds if Chrysler can't get the union to play ball. Chrysler's none-too-subtly threatening to pull all of its operations from Canada if they don't get what they want from the government. I say they're all morons.
To the unionistas: Your industry - or at least the non-competitive, domestic side of it - is dying. You'll all be out of work before long if you don't get off your high horses and agree to major concessions. The days of upper-middle-class standard of living on a barely-high-school education are over. Deal with it.

To Chrysler: Ronald Reagan fired the air traffic controllers in 1981 when the union tried to play tough. You're telling me you can't find and train replacement auto workers from the legions of unemployed Canadians who would be eternally grateful to have a job? What is it about union labour anyway that makes companies like yours such scaredy-cats? Other companies just down the road from you - Toyota and Honda, namely - have managed to build motivated non-unionized workforces. Why can't you?

To the government: Call Chrysler's bluff. They want out? Let 'em. Considering how much it would cost to set up shop elsewhere, it's probably an idle bluff, anyway. Either way, it's high time you started focusing your efforts - and our money - on industries that have a future and companies that actually have a clue.
Your turn: Should we be getting tough with unions, and the old-style companies that can't seem to break them? Will this recession finally kill organized labour? Should it?

In related news: I've been invited to appear on TVO's The Agenda with Steve Paikin program this coming Tuesday, and I suspect this very issue is going to come up. The episode is entitled Whither Industrial Ontario, and we'll be exploring the issues in the wake of last week's provincial budget. The panel includes three MPPs, one from each party, so it should be a lively hour of television. The fun starts at 8 p.m. EDT.


David Edward said...

yes, be done with Unions, and can we please start with the teacher's union. what a lot of money has been wasted down that rat hole and in the Dept of Education ( federal) which as far as I can tell has not educated ONE child..

ranting right along side you. the car companies dug their own grave, and we can't really undo it no matter how many billions we throw at them.

Jeannette St.G. said...

Wishing you can verbalize what's in your heart in the Agenda with Steve Paikin!
Right now I'm so disgusted with the car companies, I can't see straight and be objective - so I hope you can reach something with your voice and in yourwritings:)

Pamela said...

I think you covered it nicely.

Tanya (aka NetChick) said...

thanks for this, Carmi. your thoughts are exactly my point of view, as well.

they're all wrong. they all need to give their heads a shake. and of course the government should expect these companies to re-think and have a plan before just forking over that much cash to bail them out.

i think this is a much-needed reset to the way things are. i hope it ends soon, so people aren't hurting, but i'm also glad we're finding more efficiency because of it.

bARE-eYED sUN said...

*sigh* we don't like to engage in flaming. we read blogs as a way to relax a bit. every so often we read union-bashing posts and move on silently. other times we feel compelled to comment.

we're not very knowledgeable, but we are aware of our surroundings, somewhat. union workers do not design cars, they build them.

union members have also built the so-called middle-class by raising wages and benefits.

many of the benefits that non-unionized workers take for granted are there because unions have fought for them: the paid vacations, the pensions, the eight-hour day, the weekend, . . .

as you say there are many unemployed who need jobs. if non-unionized companies afford their employees benefits at a par with unionized companies it is to keep unions out.

they don't want to negotiate with their employees, they'd much rather cut wages and run, or fire employees, or save by running unsafe operations, or as you propose put all cost-cutting on the backs and lives of their workers.

Reagan fired the Air-Traffic Controllers,weakening organized labor and the middle-class have had no real wage increases since. even in times of "prosperity".

auto-workers have been "giving back" and taking it on the chin for years. can they give up more? of course they can.

and as they do give back, so will you and the rest of us: consider loss of tax base and purchasing power and the ripple effect these have on the economy.

think of the race to the bottom that you propose as companies compete on the basis of lower labor costs as opposed to competition on the basis of product. who exactly will buy the fuel-hogs?

Gary's third pottery blog said...

I would like to see organized labor stronger. People should be able to organize together for better working conditions. However, in the auto industry the whole business is changing somehow, and YES, workers need to work with management, not dig in their heels and try to move the clock back. Where labor might want to focus its efforts in the future is with the poor saps who work in places like Smallmart or other such places where the pay and benefits are at the bottom.

Lifelong Learner said...


I absolutely think it's time for the auto industry to take on the unions. They've been driving up the cost of cars for years. When I heard what people in the factories made an hour, I was almost sick! I worked three jobs (at once!) to get myself through college so that I could get my education degree, only to end up making a fraction of what they make. That's tough to swallow.

Heather said...

I agree with all you said - to the unions, to Chrysler and to the government. Unions have more than outlived their purpose.

momemts in time said...

Carmi I am not from Canada so do not know your situation but have done a thought from a UK perspective here on my blog as it is longer than a normal comment.

No one side is ever completely right in the various arguements between governments, unions and the car giants, and no one owns reality ~ even after post modernism!

Nikky said...

what everyone seems to forget is what started this whole mess in the first place. the economy. if we weren't in this 'crisis' then the auto industry wouldn't be asking for loans from the government. the big three are asking for loans because people aren't buying cars. it's not just their cars either. if you can't get a car loan even with good credit then you don't buy a car. with the credit market frozen in the states people with a credit score of 800 can't get a car loan. they can't get a mortgage for a house either but nobody is asking the construction worker to take a pay cut!

yes union workers make a lot of money. what is deceiving is the way the media has listed the wages of unionized auto workers. that $75 an hour that was blasted all over the media is the hourly wage of employees plus all of their benefits.

now don't get me wrong here, I am not a fan on unions at all. at the same time though I do see the need for them. Everywhere I look people are demanding that the unionized auto workers take a pay cut. the public is asking more than 20,000 people to decrease their pay because the public thinks they are paid to much. Lots of folks with post-secondary educations think that it is wrong for a factory worker to make a lot of money. isn't this a democracy? isn't democracy based on equal opportunity for all? Just because I don't have a post-secondary education does that mean that I should be shoved to the side and forced to make minimum wage for the rest of my life? should we be forced to live on the edge of the poverty line because some folks with higher education than ours deems our jobs don't deserve a good living wage? I work hard for the money I make. I worked hard to get my job. The folks at the non-unionized Honda and Toyota companies in Canada get paid a similar wage to the unionized workers at the big 3 and nobody is asking them to lower their standard of living. It's okay for them to make that amount of money but not for the workers at the big 3? seems like a bit of a double standard to me.

so many are all about letting chrysler leave Canada. well isn't that fantastic for you. i don't work for chrysler but I do work in the auto industry. if chrysler goes I can kiss my job goodbye. so can at least 10,000 other workers in this country, and that's just the chrysler workers. That isn't counting all of the other auto industry jobs that will be affected, the steel jobs that will be affected and the trucking jobs that will be affected.

what is the world coming to when we let public opinion decide the wages and fate of people.

Anonymous said...

Everyone has their own ill informed opinion on unions ( for or against) so I will not add my worthless two cents.
If Chrysler does pull out, I would like to see the Goverment and citizens show some backbone and patriotism for a change.

Foe starters, all the tooling in the plants cannot be removed to build the vehicles elsewhere.
The government has control of all property until the taxes to the federal and provincial governments are paid, and ALL monies including pension obligations are paid to the workers.
Have the Canada customs officers hold all incoming Chrysler vehicles at the border until Chrysler pays to have every single one individually inspected.-security against terrorism, smugling etc don't ya know!
Consumers should NEVER buy another Chrsler product in Canada.
I don't know why they would buy one now. There is nothing Chrysler builds that some other company doesn't make better, with superior quality and resale.
What would really be funny is to invite Ralph Nardelli and Tom Lasorda and the big-wigs at Cerberus to a meeting in Ottawa, and arrest them for the unpaid taxes owing and for attempted blackmail.
A few weeks locked up with the sex offenders may not bring jobs back, but it would be a good lesson to other C.E.O.'s who want to screw with our Country.

Wistfully yours
Bradley B.

Daryl said...

There are many ways to get back on track economically ... the easiest is to stop paying enormous bonuses to top management who already earn 6-7 figure salaries and perks ... once that happens Unions wont seem so evil ..

rashbre said...

I don't pretend to understand the dynamics of the Canadian auto industry.

What I have observed is that as global markets opened up, the costs migrated to the lowest cost producers, and that has left increasing gaps in some economies.

There seems to be a short-termism in much of the industrial model driven by share price returns and bonus-based global capital markets investment models.

That means there's airport-sized car lots of unsold vehicles all over the planet as people defer purchases as part of belt tightening.

I don't know exactly how it all works, but there's less money around and it moves slower, creating insidious structural collapse. Some of the new disputes are symptoms of this.

You'll have noticed the Chinese eyeing Saab, Saturn and Hummer lately. Such changes move production and any associated wealth creation to new economies at the expense of the traditional ones.

All stakeholders - governments, investors, workforces and consumers had better take note.

Joining today's debate via Netchick's!


KM said...

HI! Thanks for stopping by my blog and leaving that great comment about my photo. I appreciate it. It's very encouraging. I just picked up my camera again after a long lapse -- about a decade! I'll be joining your thematic photo challenge -- looks like a blast! Love your blog, it's a great read! And your "100 things" -- I give blood every week too! or rather they take it from me! Keep up the great journalism & photos! Peace~

Jamie Dawn said...

Congrats on your appearance on that program.
You always have sound minded comments, and from what I've read here and in the past, you are intelligent.
Unions are not a bad thing in some circumstances, but unions can morph into very bad things.
As you probably know, Americans are not happy with the hundreds of billions and now trillions that our government is spending.
Both our countries need common sense leadership in this time of economic crisis.

G. Harrison said...


Long time no see, as we say in South London.


Bail outs are so old I look like a spring chicken.

Support? To some industries, yes, with clear expectations rooted in sustainability for future generations.

There's nothing wrong with a job in the transportation sector as long as it can be supported by the natural environment in 50 years. (Grandson Ollie will be 53 by then, the age I retired).


I love The Agenda. Congratulations in advance. See you Tuesday night.


Wendy said...

Yikes, you've really opened up a hornet's nest, haven't you?
I agree wholeheartedly with your point of view.

Lori Schmidt (LoriProPhoto) said...

Well said as always Carmi! Time to get back to the basics, hell the direction the big businesses and politicians have gone hasn't worked thus far just made us broke and them rich, so lets get on with another strategy and rebuild our country and the rest of the world and bring hope back to everyone.

It won't be a big deal to drive your "old" car for a few extra years rather than buy a new one at an inflated price for example, to sell the fleet of Lear Jets for the executives, stop the retreats and so many other unnecessary money guzzling reasons to make a few rich. Heck while I was in Zimbabwe I drove a 25 year old car!!! We couldnt buy spare parts so everything from clutches, tyres to brake pads were recycled and rebuilt to keep the vehicles on the road. I know all about pulling in my belt because things havent been available to me and I am talking of basic every day things like gas, rice, sugar, vehicles, toilet tissue, canned foods and many many other things. It is amazing what you can do without when you are faced with a predicament.

I am not big into politics, have lived on 3 continents and four countries in my life and am tired of all of the red tape and unnecessary spending by big companies and governments (including the oil and motor industry companies). Oh boy don't get me started!!! LOL

Lori Schmidt (LoriProPhoto) said...

Wanted to add I was off to take a Valium LOL but the post went through before I got it typed!!!

Lori Schmidt (LoriProPhoto) said...

Oh yes and another thing, bring the jobs back to the US and Canada that have been farmed out to China, Phillipines, India, Pakistan, South Amercia and who knows where else, and stop trying to solve everyone elses' problems by pumping money we will never see again into their countries at the expense of Canadians and Americans who need it far more, after all it is money we have paid as taxpayers, we should be seeing the benefits.

Off to take another Valium LOL

Anonymous said...

hi carmi! i think this post says everything i have to say on this topic:

"The days of upper-middle-class standard of living on a barely-high-school education are over."

those who produce get rewarded, those who don't cost our economy money. you're right, we need to start focusing on industries that are relevant and make Canada a global force with strong resources - natural AND human.

thx for the comment on my blog by the way. nice to meet you too!

Anonymous said...

my father was an autoworker (ford) and that was all i ever drove until my i bought my current car after ford refused to listen to my problems i was having with that car. i now drive a civic, it was a difficult decision for me to switch but the difference between the two is impossible to even describe. i need a company that stands behind what they make, ford wouldn't do it for me.
i don't know why we are bailing out companies that are building "things" that no one even wants. why not look at what our country needs, in ontario, we truck our garbage across the border because we don't have the facilities here to keep up with our recycling programs, so why not build a facility here, train those auto workers or whoever to work in them and keep our garbage and our own working.

Unknown said...

Great post - great comments! just ingesting this right now, may say more later.

Mel Fraase said...

Thank you! Time to go unions!
I only wish the American government would be so strict with their bank bailouts as they are with their car company bailouts!