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Tuesday, April 28, 2009

Let The UAW Have Chrysler

Reports indicate that the deal the United Auto Workers has struck with Chrysler will include majority Union ownership of the company, and a seat on the Board. This is the single best news the American auto industry has heard in decades.

I have been a harsh critic of auto unions, which have imposed uncompetitive cost structures and work rules on the American auto industry. When it was unions against management, the unions had every incentive to push for more and more until there was nothing left.

Union majority ownership of Chrysler hopefully will force the UAW to act in the company's best interests, even if against the short-term financial interest of union members. No more excuses. If Chrysler fails, it will be the failure of the UAW without question. If Chrysler succeeds (and I hope it does), it will be the success of the UAW.

It is unfortunate that we have come to this point, but better late than never.

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3 comments:

  1. Great Point. Had the same thought myself when I heard this possibility. My only fear is if taxpayers get stuck subsidizing their pensions and health care costs, which looks like it might be a very real possibility.

    Bottom line: "If you broke it you bought it."

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  2. They have just one seat at the board ? If Chrysler fails it will be the "management's" fault (according to NYT and WaPo) altough UAW tried their best. And if Chrysler succeeds (according to NYT and WaPo) it will be the success of the unions. Card Check + 2nd scenario... or even better Card Check + 2nd scenario + Bailout... Do I have to spell it out ?

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  3. I'm afraid Devrim might be right. I'm betting Chrysler's going to be the 1st in line for the next auto-industry bailout. Maybe GM and the rest will wanna follow suit to guarantee themsleves access to all that free taxpayer money.

    Maybe other industries too...

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