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rfmcdonaldGrand. Chrysler Canada looks like it may yet collapse, and why? Blame the workers, it seems.
The unions don't seem very interested in this.
Never mind the existence of European and Japanese car companies with superior efficiencies, within and without North America. With BRIC countries coming up with inexpensive vehicles like the Tata Nano, any automotive industry is going to have to innovate radically in order to survive. If Chrysler doesn't, well, creative destruction always works, with Ontario coming off the poorer, but what can be done.
I wonder: Toronto's peripheral communities, places like Oshawa and Ajax and Oakville, depend heavily on the automotive industry. If it self-destructs and these communities end up collapsing economically, might Toronto yet come to resemble the European urban pattern of a prosperous core and an impoverished periphery?
Senior executives of Chrysler LLC took the extraordinary step Friday of sending a letter to employees urging them to support the company “at a crossroads” in its history by agreeing to major reductions in benefits.
“Let me be clear, our negotiations are about saving Chrysler Canada,” chairman Robert Nardelli and president Tom LaSorda said in the letter to employees, ahead of a resumption in negotiations on Monday.
“Without labour concessions Chrysler Canada's manufacturing operations will not survive long-term,” the letter said.
The letter caps a week of growing public pressure on the Canadian Auto Workers union to agree to $19 worth of cuts in benefits to help the auto maker meet a federal government requirement that it slash its labour costs to $57 an hour to match those of Toyota Motor Manufacturing Canada Inc.
[. . .]
The Chrysler letter comes on top of comments by Fiat SpA chief executive officer Sergio Marchionne that his company will walk away from a deal to save the no. 3 Detroit auto maker if the CAW and the United Auto Workers don't agree to more concessions.
The unions don't seem very interested in this.
Over a quarter century of bargaining with Chrysler LLC, the Canadian Auto Workers union has won a pack of benefits and special compensation for car factory employees the average industrial worker in Canada might only dream of -- reimbursement of a portion of out-of-province health care bills, child care subsidies, even partial payments of lawyer fees.
Now, the union’s leaders face a stark choice: Give up many of those perks they won through legitimate bargaining and risk losing jobs anyway with an automaker struggling to sell cars. Or hold hard to those gains and risk contributing to Chrysler’s demise.
In a statement released Friday afternoon, CAW President Ken Lewenza denounced the federal government and Chrysler for making "painful" demands on his members based on misleading financial information. And he suggested the union is prepared to let Chrysler fall into creditor protection, from which it might not recover.
"We will work to defend the interests of Canadian autoworkers," Mr. Lewenza said, arguing his union has a track record of making Canadian auto plants competitive. "If Chrysler or any other company goes into bankruptcy protection (an increasingly likely prospect, given the stalemate with bondholders in the U.S.), it will not be because of us."
[. . .]
n his statement, Mr. Lewenza called Chrysler’s letter "offensive" and accused the automaker of wanting to inflict long-term damage on the credibility and influence of the CAW, Canada’s largest private sector union.
"The past week has seen an unprecedented and outrageous series of attacks on Canadian autoworkers and their union. One after another, business executives and political leaders, working clearly in tandem, have lined up to denounce the CAW’s role in the auto restructuring process, and to demand that we accept up to $19 per hour in concessions or else face massive job losses and economic dislocation," Mr. Lewenza said.
Never mind the existence of European and Japanese car companies with superior efficiencies, within and without North America. With BRIC countries coming up with inexpensive vehicles like the Tata Nano, any automotive industry is going to have to innovate radically in order to survive. If Chrysler doesn't, well, creative destruction always works, with Ontario coming off the poorer, but what can be done.
I wonder: Toronto's peripheral communities, places like Oshawa and Ajax and Oakville, depend heavily on the automotive industry. If it self-destructs and these communities end up collapsing economically, might Toronto yet come to resemble the European urban pattern of a prosperous core and an impoverished periphery?
