Unholy CAW

Unions have become an easy target for those looking for who to blame for the quagmire US automakers ended up in. Some say that Detroit Three have become major pension funds with car making as a side business. Sure, to the most of the automotive world, most of US cars indeed do look and drive as if a bunch of accountants designed them, but that's not the point.

Both UAW and CAW has been through series of tough negotiations with the Detroit Three during past year or so in a desperate bid to lower the overall costs of running the companies. Hard times didn't stop Buzz Hargrove, now former CAW leader, to humour members of the general public with claims that it's the imports that were killing car manufacturing in North America, a state of the affairs for which he blamed the respective governments.

The results achieved in the talks looked good at the time, but with GM on it's way to Chapter 11 and some serious restructuring being worked out to save what there's to save, and Chrysler looking half-doomed, calls for even more union concessions intensified. Canadian Industry Minister Tony Clement had to say just few key words to get the message across, such as April 30, taxpayer money and “I cannot do that”.

The warning came essentially only few hours after Fiat, generally regarded as the one and only possible salvation force, said it would walk off the taking over Chrysler if the labour costs in Canada are not slashed to $19. What Clement called a “logical position”, current CAW leader Ken Lewenza deemed “unreasonable” and said it was not going to happen. Buzz Hargrove had something to say, too. He trashed Fiat's CEO Sergio Marchionne and said something along the line that CAW negotiated costs are already lower than costs of Japanese car makers' operations in Canada because Japanese manufacturers' costs are higher in Japan. If you think that doesn't make sense, Mr. Hargrove failed to realize, among other things, that FIAT is not about to take over Honda nor does the Toyota's fate depend on Italian investment.

Chrysler tried to blackmail Ottawa and conditioned keeping its Canadian operations alive with a bailout. CAW's stance is similarly arrogant, the only difference is they have nothing to win and nothing to offer. CAW can only lose. Slashing costs and keeping what's left of Chrysler running is the highest price they can get. Fiat can act from the position of powerful. CAW cannot.