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The showdown is on: behind the strike notice

by Bill Cawthon on

FCA US employee relations VP Glenn Shagena was probably expecting the letter he received from United Auto Workers (UAW) vice-president Norwood Jewell yesterday.

By a 65%-35% margin, the union members rejected Jewell’s contract with FCA. Next, the union made its challenge.

Motown-Showdown-Web

Anyone who is surprised it has come to this hasn’t been paying attention.

UAW president Dennis Williams is stuck between a rock and a hard place. Due to recent legislation, union members in Michigan are free to leave the union. Up to now, UAW leaders have focused on attracting new members; now they have to work to keep the ones they have.

Williams is already in some trouble. Workers have flocked to social media sites and there are already questions about his leadership and willingness to confront Marchionne.

Mr. Marchionne has his own problems. Hhe have a reputation as a hard-nosed negotiator to uphold, and any sign of weakness would scuttle his efforts to find a corporate partner. The UAW needs commitments that Mr. Marchionne wants to avoid making. He wants the two-tier wage system to go away, but doesn’t want labor costs to rise; and product shifts announced during the talks could be net negatives for U.S. production, especially when the next market downturn hits. When the market cratered from 2007 to 2009, car deliveries fell by 30% but light truck sales plummeted more than 40%.

Two leaders have drawn a line in the sand, and each has a lot riding on that line.

It will be interesting to see who blinks first.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.


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