Chrysler's Marchionne jilted again in labor talks
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Canadian-produced models, including minivans, accounted for 28 percent of Chrysler's U.S. sales so far this year. Chrysler CEO Sergio Marchionne also has taken a hard line with the CAW this year. |
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DETROIT (Bloomberg) -- Sergio Marchionne, Chrysler Group LLC's passionate chief executive officer, has been jilted again in his bid to be picked as the company to set the wage-and-benefit pattern in contract talks with a major labor union.
Yesterday, the CAW selected Ford Motor Co. to establish an agreement the union can seek to impose on General Motors and Chrysler. Today, the union said it reached a tentative four-year contract with Ford, averting a strike at the automaker's Canadian plants hours before a midnight deadline.
Last year, the UAW selected GM to set the pattern, triggering an emotional letter from Marchionne to UAW President Bob King, saying, "I know that we are the smallest of the three automakers here in Detroit, but that does not make us less relevant."
Now Marchionne is crying foul again.
Chrysler said it's "very concerned" about the CAW's selection of Ford. "We don't think they are in the best position to take on this role given the significant reduction in their Canadian footprint."
Chrysler makes more models in Canada than Ford, which closed a factory in Ontario last year.
Marchionne also has taken a hard line with the union, suggesting he may move work elsewhere.
"Sergio has developed a reputation for being less flexible than his counterparts," said Harley Shaiken, a labor professor at the University of California at Berkeley. "Certainly his rhetoric is tougher. That may have had a perverse impact on his goal. It isn't exactly a welcome mat to being the target."
Contracts expiring
Contracts covering about 18,000 CAW members at GM, Ford and Chrysler expire at 11:59 p.m. ET.
The automakers contend their Canadian labor costs are among the highest in the world, driven by the strong Canadian dollar and higher wages for Canadian workers than their U.S. counterparts.
"Nobody in their right mind would continue to create an unlevel playing field in its own organization," Marchionne told the Toronto Globe and Mail Sept. 7. "It's impossible. We have other plants, other options."
The automakers have sought to make permanent a two-tier wage structure in Canada, based on a similar agreement it reached with the UAW in 2007.
The CAW opposes two-tier wages and wants new hires to have the opportunity to eventually make compensation equal to senior workers.
The union may have seen Ford as the best company to establish a deal that all three companies can live with, Shaiken said.
'Sergio's interest'
"The notion that Chrysler is the only appropriate target certainly reflects Sergio's interest, but not necessarily the broader interests of the whole industry and the union itself," Shaiken said. "Sergio is a key actor, but he is not the director of labor relations in Canada."
Canadian-produced models accounted for 28 percent of Chrysler's U.S. sales so far this year, according to Autodata Corp.
The automaker produces its Dodge Grand Caravan and Chrysler Town & Country minivans in Windsor, Ontario.
It also builds the Chrysler 300 and Dodge Challenger cars in Canada. Made-in-Canada GM vehicles, which include the Chevrolet Impala and Cadillac XTS sedans, accounted for 15 percent of its U.S. sales this year through August, according to Autodata.
Ford's Canadian-built models, which include the Edge sport- utility vehicle and Flex wagon, have accounted for 7.5 percent of its U.S. sales this year, Autodata said.
"These negotiations are pivotal in shaping the future of the automotive landscape in this country," Chrysler said in a statement Sunday. "Chrysler's goal in these negotiations is to develop an agreement that is conducive to long-term job security in Canada."
Shaiken said he suspects Marchionne is uncomfortable with the North American labor tradition of pattern bargaining, especially since Chrysler hasn't had the chance to establish the economic framework for contracts in the U.S. or Canada.
That isn't the tradition in Italy, where Marchionne is also CEO of Fiat SpA, which controls Chrysler. "In Italy, Fiat is the only game in town," Shaiken said. "The pattern begins and ends at Fiat."
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