UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

June 10, 2009

ANTI-UNION FIAT HAS SORRY RECORD

Phil Mattera, Dirt Digger's Digest - Only a few years ago, Fiat was accorded the same basket-case status that came to be applied to Chrysler and GM. In fact, in 2000 the Italian automaker was forced to turn to GM for help as its market share began tumbling both at home and in the rest of Europe. GM purchased a 20 percent stake in Fiat as part of a strategic cooperation deal between the two companies. In 2004, as Fiat’s condition grew worse, it invoked a provision of the cooperation agreement that would have compelled GM to buy the company. GM had no interest in taking on Fiat’s huge debt load, so it paid $2 billion to get the Italians to go away.

Fiat’s chief executive Sergio Marchionne decided that the company’s only path to survival was to combine with other car companies. He saw an opening earlier this year when the federal government agreed to provide emergency loans to Chrysler but pressured the company to restructure and find a partner. Fiat agreed to be that partner without investing any cash.

When Chrysler went back to the government for more aid, the Obama Administration took an even harder line, explicitly requiring the company to join with Fiat. The feds later pushed Chrysler into a bankruptcy filing designed to bring about the emergence of a reorganized company run by Fiat.

Marchionne took full advantage of his privileged position to intensify the pressure on Chrysler’s unions to make major contract concessions. He took a tough stance both with the United Auto Workers and the Canadian Auto Workers, threatening to scuttle the deal unless they capitulated. Canada’s National Post headlined its story "Fiat Puts Gun to Chrysler Union Heads." Both unions gave in to the pressure and signed new contracts with major givebacks.

Fiat is no stranger to hard-line labor relations. Its relationship with unions has been tumultuous throughout the company’s history. The 2002 announcement of a 20 percent cut in the Fiat’s Italian workforce opened a new period of unrest in its domestic operations. In recent months, as Marchionne has pursued his grand plans for the creation of a new auto giant, Italian metalworkers have grown worried that they may lose out. Last month they held a national protest near the company’s headquarters in Turin. Frequent work stoppages and blockades have been taking place at various Fiat plants.

Chrysler’s workers may soon find themselves resorting to similar tactics. Even though 55 percent of the company will initially be controlled by the UAW’s Voluntary Employee Beneficiary Association, it is likely that Fiat’s executives will be the ones really calling the shots. The VEBA will have its hands full meeting its obligations to workers. In fact, UAW President Ron Gettelfinger has said the union would probably sell its Chrysler holdings as soon as it is financially feasible.

The party that has the most to gain from Chrysler’s restructuring is Fiat. Even though Marchionne was thwarted in his attempt to go from the Chrysler coup to the purchase of GM’s European operations, he still has grand dreams and is seeking other industry partners. In the meantime, the Chrysler deal will enable Fiat to expand sales of its small cars in the North American market, creating more competition for the new GM. How nice of the Obama Administration to use U.S. taxpayer dollars to make this happen.

3 Comments:

Anonymous one-eyed jacks said...

I'm of the opinion the purpose of the financial bailouts and the destruction of the American auto industry are the culmination of a long term plan to rewrite the American and world paradigms, specifically the biggest transfer of wealth in history re the bailout, and the elimination of forty thousand of the last sixty thousand living wage union jobs.We're all workin' at Walmart now whether we like it or not. Hope the workin' stiff enjoys paying taxes to get fucked over.

June 10, 2009 4:36 PM  
Anonymous Anonymous said...

Isn't it clear to everybody in America yet? Your government has been devoured by superwealth and your country is being taken down from the inside! Working people do not stand a chance against such extreme concentrated wealthpower as you have been tricked into allowing, and the answer is to limit personal fortunes so no one can ever again accumulate this kind of power to take everyone's earnings and future away.

I'd buy a horse before I'd buy a Fiat anyway. Horses last longer and break down far less.

The first lie Obama tells you is that he doesn't lie - JUST LIKE BUSH AND CHENEY AND CONGRESS.

June 11, 2009 7:45 AM  
Anonymous Anonymous said...

So nice to see that the Unions are not getting what they want this time around. Maybe now the taxpayers can stop taking care of the Automakers and actually take care of our childrens education. They put themselves in the mess and they should have been the one to get themselves out of it without the taxpayers money. They threaten strikes so they can get more money or benefits while the people who are actually buying their cars are the one's getting screwed due to outrageous prices they charge. About time someone took control and made them wake up and smell the coffee! President Obama has not lied, he has stated from the start that this was a mess and it would take time to fix it. Maybe if Mr. Bush had actually done his job we would not have been in this mess in the first place.

June 21, 2009 10:14 PM  

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