The High Cost of ‘Fighting Those Damned Unions’

Talks Tip Chrysler Toward Bankruptcy
As Negotiations With Creditors Falter, Officials Finalize Details of Restructuring

By David Cho, Peter Whoriskey and Kendra Marr
Washington Post Staff Writers
Thursday, April 30, 2009

The Obama administration last night planned to send Chrysler into bankruptcy, replace chief executive Robert L. Nardelli and pump billions of dollars more into the effort, all in hopes the company can emerge from court proceedings as a reenergized competitor in the global economy.

Government officials clung to 11th-hour hopes last night that bankruptcy could be averted, but talks broke down with Chrysler’s creditors. A bankruptcy filing could happen as soon as today.

. . .
Under the administration’s detailed court strategy, ownership of Chrysler would be dramatically reorganized, the leadership of Italian automaker Fiat would take over company management and the U.S. and Canadian governments would contribute more than $10 billion in additional funding. . . Its ownership would be divided, with the company’s union retiree health fund receiving a 55 percent stake, Fiat would claim as much as a 35 percent share and the United States would take 8 percent. The Canadian government would receive two percent.

–read entire article–


Present stockholders are wiped out. Sorry ’bout that folks, but bankruptcy is a hard road and Chrysler (like General Motors) was just not quite too big to fail. The United Auto Workers are in the saddle, those guys who some say broke the industry.

Some say otherwise, myself included.

There is only one equitable place left for union representation and that is on the boards of directors of the companies whose workers they represent. Labor and management can no longer afford to stand at odds with one another. A win for one can no longer be a loss for the other. The new paradigm is creative partnerships that allow business and industry to thrive and make labor a shareholder, as wooed as Wall Street, as valuable to growth as the quarterly uptick.
If creative partnership is too much a buzzword, forgive me that. Labor has always known what is wrong with the mechanism, be it on the factory floor or the crowded cubicles where computer programs rule the workday. You want to know why things don’t work, why profits are so elusive, why absenteeism and burnout are costing more than raw materials? Ask at the bottom. You want to know why job satisfaction is so poor that only wages keep the boat afloat? Send the consultants home and ask at the bottom. The bottom is where truth lies and profit can yet be mined.

Avoiding union participation over most of the 20th century, airlines and auto companies are now collapsing into the arms of their arch enemy. The list of busted organizations, from the Chicago Schools to Chrysler, is a long, sad tale of cave-ins to unions. Had they been seated on Boards of Directors and made part of long-term planning, included (as investors are) in the distribution of profit, we might find ourselves in a different business environment.
But then including workers in profit is socialism, right? And socialism is a terror, right? And terror (we all know) is . . . whatever.

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