This CAW/Chrysler/Fiat item is a great study of clashing negotiating strategies, and Ken Lewenza and C0. are very likely looking back instead of looking forward (which seems to be common with U.S. automakers). I confess that my perspective is shaped by this article in today’s Financial Post, a conservative (anti-union?) publication. For full disclosure, my education is heavily in business, and I teach in the MBA program at Schulich Business School.
If everyone has it in for the CAW, as Lewenza claims (”[the Canadian Government is] interfering in our negotiations [with Chrysler), then he needs to fight back with some pretty powerful evidence. The fundamental premise of the “other side’s” argument is that CAW workers are paid much more than Toyota and Honda workers, so the wages need to come down to competitive levels.
Lewenza challenges that argument directly (although it is at the very end of the article; damn right-wing editors!). He says that “Canadian executives at Toyota and Honda have described many times their strategy of essentially matching wages, pensions and core benefits to those paid in CAW-represented facilities.” So, I guess, it is just a shell game, and CAW workers and workers at Toyota and Honda are ALREADY paid the same wages, right? If that is the case, then there must be another reason that Chrysler is so unable to compete. Such as, no one buys the cars. This is not good news for CAW workers in Chrysler facilities.
This situation is a clear example of an entity (CAW) or at least a person (Ken Lewenza) so heavy with history that they cannot shed a combative/competitive mindset that has no place in competitive industries where stakeholdes (including government) need to work together to beat the real competition. I feel sorry for the people who are being mislead so badly by Mr. Lewenza. This will be a powerful lesson for organized labour.
You won’t need a link to find references to Ken Lewenza’s response to Fiat’s “take-it-or-leave-it” offer (on April 16, 2009). This story is moving quickly, so my thoughts may quickly be irrelevant. Mr. Lewenza cried foul that Fiat CEO Sergio Marchionne was not taking the time to “build the relationship” with Chrysler and its employees before embarking on this joint venture.
I am all about the “relationship” side of the business. There is a place for relationships in the Fiat/Chrysler landscape, and I think that Mr. Marchionne is familiar with the value of relationships, as well. I suspect, he has simply opted to put results first. If my guess is right, this is a strategic direction given that his company is operating in a fiercely competitive environment and cannot afford to make any concessions that are disproportionate to added value. I think that his shareholders (and business partners) would applaud that.
Relationships are absolutely necessary, but in some instances, it will have to be compromised. I think this is one of those situations. Maybe it is a dose of “tough love” to an entity who no longer has a competitive wage structure.
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