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New CEO to Chrysler workers: Let them eat cake

Published Aug 18, 2007 11:37 PM

“Welcome to the New Chrysler.” This was the message written in the icing on the cake served to workers at Chrysler’s Twinsburg, Ohio, stamping plant on Aug. 6, the day that private equity firm Cerberus formally took possession of 80.1 percent of the automaker.

It was déjà vu to workers with nine or more years seniority, who remembered a similar cake and coffee celebration the day Chrysler became part of DaimlerChrysler.

The PR blitz at Chrysler World Headquarters in Auburn Hills, Mich., was far more grandiose, with acrobats and fireworks for the 10,000 workers who worked at the headquarters or were bused in.

Yet many of those eating company cake are wondering where they will be working in the next year or two, as Chrysler accelerates its “Recovery and Transformation Plan”—the cutting of at least 13,000 jobs.

What made the whole charade hardest to digest was the surprise announcement of who would be the new Chrysler CEO—and why. Pushing aside Tom LaSorda, CEO of the Chrysler Group when it was part of DaimlerChrysler, Cerberus named Bob Nardelli, the disgraced former CEO of Home Depot and past General Electric executive, as Chrysler’s new CEO.

At GE Nardelli was a protégé of Jack “The Hammer” Welch, the CEO known for taking a hard line with the unions and demanding harsh concessions. When Welch retired and Nardelli did not get the top executive position, he went on to run Home Depot.

There he developed a reputation with store managers for demanding staff cuts and pay cuts for those remaining workers. Embroiled in controversy, Nardelli was forced out of Home Depot, but with a whopping $210 million severance payment.

Nardelli will reportedly receive no salary but will be paid according to “performance.”

Because there is no regulation or public disclosure of private equity finances, Nardelli’s “performance” pay can be kept secret. His earnings will remain a mystery, which is ironic considering the number of times the Big Three’s figures on union labor costs are quoted in the media. Based on the income he’s accustomed to receiving, however, it can be assumed that Nardelli’s pay will meet any thinking person’s definition of excessive—assuming he can “perform.”

News reports leave no doubt as to what is meant by performance. “One of Nardelli’s jobs will be to reduce Chrysler’s high labor costs,” reported National Public Radio the day that Nardelli’s appointment was announced.

“Maryann Keller, a long-time auto industry analyst, says Cerberus is now under pressure to generate more money from Chrysler to pay off debt. ‘There is going to be a much greater focus on really stripping costs out of this company, much faster than we might have anticipated,’ she said.

“Cerberus may also think Chrysler’s current leaders aren’t up to the task of dramatic change. Sean McAlinden, an economist with the Center for Automotive Research in Ann Arbor, says an outsider may be more willing to make drastic cuts because he or she has no connections to Detroit or the industry.

‘He said the choice of Nardelli ‘is a comment on current Chrysler management that they probably ... can’t make the harsh decisions that Cerberus probably thinks have to be made.’

“For his part, Nardelli says he does not want to change Chrysler’s current restructuring plan, which includes cutting 13,000 jobs. He says he just wants to speed it up.” (National Public Radio, All Things Considered, Aug. 6, 2007)

Workers, however, have no reason to take Nardelli at his word. With the current financial crisis on Wall Street and around the world intensifying, it won’t be long before the new bosses cry for additional cuts.

Contract negotiations: No business as usual

The timing of Nardelli’s appointment came just weeks after negotiations began between the Big Three automakers and the United Auto Workers union. To put someone in charge who is nothing but a high-priced hatchet man sends a powerful message to the UAW. Cerberus is not interested in cooperation—they are out for blood.

Canadian Auto Workers President Buzz Hargrove has expressed concern. “During that time, [when Nardelli ran Home Depot] there were a lot of workers who lost their jobs, and there were a lot of managers who left the company,” Hargrove said. (NPR, Aug. 6)

UAW President Ron Gettelfinger, however, joined Nardelli and now number two boss LaSorda on the podium during the big celebration.

What could Gettelfinger be thinking? Does he think he’ll get a better deal at the negotiating table by making nice with these corporate cutthroats? Where is the evidence to back that strategy? What is the logic in taking that approach? Concessions only whet the bosses’ appetites for more concessions.

The UAW’s current style of negotiating—a style so full of cordiality, with a strike vote a formality by a union leadership hell-bent on avoiding confrontation—has run its course. A three-headed wild dog named Cerberus is blocking the path and the bone of cooperation will not appease him.

To move forward autoworkers must understand not only the benefits won but also the limitations of collective bargaining.

The right to collective bargaining, won in the 1930s and 1940s through hard struggle, was a tremendous victory. It was a 44-day occupation of General Motors that forced the bosses to recognize and bargain with the UAW. Before the great sit-down strikes autoworkers were at the complete mercy of the bosses. One day they came home exhausted from the speedup and the next day they were on the unemployment lines. They had no vacations or holidays, no health insurance, none of the things they now take for granted.

Still, collective bargaining without a class-wide struggle only mitigates the terms of exploitation of labor by capital. It does not and cannot eradicate the contradiction between the two. Workers who understand this will reject the notion that the union has some obligation to make sacrifices in order to save the company.

The appointment of slash-and-burn Nardelli is a wake-up call for the UAW rank and file. It signifies a strategy that has brought in profit-driven financial outsiders who don’t have the foggiest notion of how to build cars. Ford brought in Alan Mulally, who came from Boeing Aircraft and has a reputation of cutbacks and downsizing. GM’s Rick Wagoner came up the ladder through his knowledge of finance and cost cutting.

In the current negotiations they plan to inflict more pain on our UAW members and retirees by cutting jobs and benefits and closing or selling off well-built plants.

The rank and file need to resist this onslaught by organizing watchdog committees across Big Three. They need to connect with sisters and brothers abroad in the industrial sectors and solidarize with the immigrant rights and anti-war movements. They must link the war at home with the war abroad.

They need to involve their communities, particularly the oppressed nationalities, devastated by rising foreclosures and previous plant closings. The committees should be prepared to defend worker/community property rights to their jobs, their benefits guaranteed under contract, and most important of all the plants they labor in and support via taxes and city services.

It’s a tall and challenging order but history shows that an independent class-wide struggle can push back even the most ruthless exploiters.

Martha Grevatt has worked at the Chrysler Twinsburg, Ohio, Stamping Plant for 20 years and is active in her local union.

E-mail: [email protected]