Ford may be on collision course with strikers
Nicolas Van Praet, Financial Post
October 11, 2007
The following story was posted online at www.leasetrader.com.
Two quickie strikes against General Motors Corp. and Chrysler LLC have raised the possibility of a third against Ford Motor Co. as U.S. auto workers adopt micro work stoppages common in other industries.
The United Auto Workers union strike against General Motors Corp. lasted about 40 hours.
The union's walkout against Chrysler Wednesday lasted six hours.
Investors are now speculating on the chances of a brief action at Ford, the last Detroit automaker with which the union has yet to nail down a new four-year labour deal.
Ford's situation is slightly different than that of the other two automakers in that it is in a worse financial position, having lost US$12.6-billion last year and mortgaged most of its assets for US$23.4-billion in credit to fund its turnaround.
The UAW has already agreed to sweeping work rule changes at Ford's U.S. plants in past months. Some argue the union therefore has a spirit of give-back with Ford, making it less likely to call a walkout.
Others say these mini strikes have so far worked well for the union leadership -- in building trust with rank-and-file members, making workers feel they're affecting the outcome of bargaining, and expressing frustration without significantly hurting the car companies. They say that makes a Ford stoppage more likely.
Shareholders bid up Ford stock as much as 7% Thursday, betting any stoppage and subsequent deal would help the company. Ford shares have gained 17% this year.
"These strikes are less to inflict harm on the employer than to show the union's militancy and make a point," said Gary Chiason, an auto industry labour specialist at Clark University in Worcester, Mass. "But the point is not just made to the company. It's made to the members as well... I think it's very new."
The strikes break from past UAW stoppages in two important respects.
First, unlike the lengthy tests of endurance in decades past where both parties battled it out for weeks, they're short.
Second, bargaining has continued even as workers walked off the job. The strikes therefore served to focus the parties and push towards a settlement.
"People look at these strikes and they say 'Oh geez, it's a return to the 1970s mentality.' But it's really not," said Aaron Bragman, an analyst at Global Insight.
"There are no workers walking out at the plant arm-in-arm singing solidarity slogans. There's definite worry and concern. It's a whole new ball game for these contract talks."
The three Detroit-based carmakers lost more than US$15-billion combined last year and desperately need U.S. workforce changes in addition to better product decision-making.
In other industries in the United States, short strikes have become the norm rather than the exception, in part because of rules allowing replacement workers, said Richard Hurd, a labour expert at Cornell University.
This week, registered nurses in California staged a deliberate two-day walkout. Taxi drivers in New York City struck briefly earlier this month.
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This story posted by LeaseTrader.com, the automotive service company that lets people transfer out of their Car Leases early. If you're looking to swap a lease or transfer out of your car lease, please visit www.leasetrader.com