Chrysler CEO Sergio Marchionne writes an enraged letter to UAW Chief Bob King.
The United Auto Workers fell short in a bold effort to reach an agreements with both General Motors Co. and Chrysler Group as the union’s contracts with the two automakers expired at midnight.
The union push appears to have been hampered by lack of any kind of strike deadline and by a tactical decision that left Chrysler CEO Sergio Marchionne fuming.
Machionne, having blown off a meeting with German Chancellor Angela Merkel to fly back to Detroit from the Frankfurt Motor Show, was clearly irritated by UAW president Bob King’s decision to spend time in the talks at GM as discussions intensified and negotiating sessions stretched into the evening hours.
Because of continuing discussion with GM, King missed an appointment with Marchionne, who in a toughly worded letter accused the union of slipping back into an adversarial role. “We have known about this expirations date for a long time,” Marchionne wrote.
The missed appointment could delay a settlement at Chrysler by as much as a week.
Meanwhile, talks at GM went right up to and then past the deadline set by the existing contract language with no sign of an agreement.
“Talks are continuing but we are not speculating on a possible extension. Our top negotiators are meeting but we’re not going to get into specifics on a day to day basis,” GM spokesman Chris T. Lee said.
As part of the federal bailout of the two Detroit makers, the UAW has been barred from striking for economic gains at either company, making it difficult to set a hard and fast deadline. Over the years, veteran negotiators, such as former president Doug Fraser, have said that negotiations tended to “drift” without a hard and fast strike deadline.
However, UAW president Bob King said recently the new UAW of the 21st Century doesn’t need to threaten strikes or set up picket lines to make its point and reach a rational decision.
King’s comments also reflect the decline in the UAW’s bargaining power. The need for General Motors and Chrysler to seek federal assistance in 2009 has put a serious dent in the union’s ability to promote its economic demands.
In fact, critics of King and the UAW executive board, including the union’s top negotiators at GM, Ford and Chrysler, have said they fear the union won’t be able to deliver on two key issues, including a significant bonus and a raise for workers on the second tier.
One union insider, who asked not to be identified, said he expects Chrysler to offer second tier workers some kind of pay increase. But it will be relatively modest, between $2.00 and $2.35 per hour. But the company’s position is basically take it or leave it, he said.
The substantial bonus that is part of the union’s demands also appears to have diminished is size as automaker fight to retain cash in the face of a possible recession and declining consumer confidence.
The union also is facing pressure to make additional concessions on health care and the companies’ negotiators have taken a hard line against pay increases for long-serving workers, who now make $29 per hour.
King’s critics have also said a contract with no raise or cost-of-living adjustment basically would amount to a cut in pay for workers over the next four years in the face of anticipated inflation.
One observer, however, said this week the companies are mindful of the lessons they learned in bankruptcy. “Detroit had to go to the government because these companies squandered, nearly a century of legacy of goodwill (among American consumers), built bad cars, made bad choices and let the union walk all over them,” he said.
Meanwhile, the union has signed a contract extension with Ford that effectively eliminates the chances for a strike at the Dearborn automaker. Because it was the only one of Detroit’s Big Three not to get a federal bailout a walkout at Ford had loomed as a real possibility.