Comments from Chrysler CEO cast shadow on upcoming auto industry negotiations
At the recent North American International Auto Show in Detroit, Chrysler Group CEO Sergio Marchionne said he wasn’t sure whether he would ask the Canadian Auto Workers (CAW) union to take a pay cut in the next round of contract negotiations.
But he was frank about the need to lower the cost of building cars in Canada.
“I sincerely hope we don’t have to get to that stage,” he said. “But you’ve got to make these factories competitive. It’s the only way we’re going to guarantee the long-term viability of this industry in Canada.”
While Marchionne did attempt to downplay the “Canadian issue,” as he called it — telling reporters “we’ve got to be careful that we don’t blow it out of proportion because it was never intended to be a problem issue” — he minced no words about the need for Canadian costs to come into line with those in the U.S.
“The Canadian system needs to be as competitive as the American side. They are not today,” he said. “We need to find a way to make them more competitive.”
His comments come just months ahead of contract talks between the CAW and the Detroit Three automakers expected to get underway sometime this summer.
By publicly announcing his expectations, Marchionne is setting the tone for negotiations — inside and outside the auto plant, says Alan Hall, a labour studies expert at the University of Windsor in Windsor, Ont.
“In this case, Marchionne knows the situation in the province (of Ontario) and in Windsor proper,” he says. “The CAW is in a weak position already but he can make it weaker by speaking not just to workers but to the community as a whole and telling them the good days are coming to an end.”
Besides its head office, Chrysler’s only remaining presence in Windsor is its mini-van plant. Hall says the community is “already suffering fairly mightily” and if there’s any sense jobs are under threat there will be public pressure on union members to lower their expectations.
It’s a tactic that’s showing signs of working, according to Rick Laporte, president of the local representing 5,000 workers in Windsor.
“We feel more community pressure,” he says. “It does turn the community against us. I read letters to the editor and they say we should take wage cuts and that he’s on the money (with his comments).”
Laporte has already heard from some of his own members who agree with Marchionne’s musings in the media, he says.
“Our biggest job is going to be educating our members,” he says.
While it’s not uncommon for management to “bargain” in the media, it happens less often in the private sector, Hall says.
Unlike the public sector, where management stands to gain from taxpayers’ support, he says the value is often less clear on the private side.
“In the private sector, there’s a lot more discipline within unions. Certainly we’ve seen that in the auto sector where they routinely get positive strike votes,” Hall says. “But that discipline is beginning to crack under concessions and the influence of free trade.”
Unions typically prefer to negotiate behind closed doors because negotiating in public can “muddy the waters,” says Hall.
Unlike the Electro-Motive situation in London, Ont., where the company’s first offer contained a drastic wage cut, Chrysler is only posturing — albeit in a stronger manner than in the past, according to Hall.
“Chrysler is soft pedaling on the front end so any changes will not be as drastic. (Workers) will be happy to have a job, and with pay that’s a little bit higher than average,” he says.
This would be less likely to provoke a slowdown, or even a strike, according to Hall, adding it’s unlikely Marchionne’s comments will have any immediate impact on productivity since so many past concessions revolved around that issue.
He notes the availability of technology is starting to have an impact on the exchange of information during collective bargaining, often before it even starts.
Hall was recently part of the negotiating team that reached a new collective agreement at the University of Windsor.
“We paid a lot more attention to what was going on online and communicated more with students and members directly,” he says. “In a way it’s helpful but it can also send people into a panic. You have to be careful.”
