Choice of a strike target is also a strategic issue but sales incentive leader GM looks like a limping gazelle to the predatory CAW negotiators.
Yes, I have cancer.
No, I'm not dead.
And if I had a press secretary, I'm sure he would be proud that in just eight words Ive managed to confirm and deny the two rumors about myself that have been circulating lately On the first matter, Pm working from home while I undergo treatments, which may explain how rumor No. 2 got started. But as this column proves, rumor No. 2 is nothing more than an exaggeration of facts.
Oddly enough that's the same way I view the continued strong sales numbers being put up by automakers. We've talked about this before, but clearly the cash-back zero-percent financing and sweet lease deals are doing the trick when it comes to sales numbers and buying market share. The thing I've harped on however, is what it's doing to the bottom line and to future sales. Those are repercussions that have yet to be dealt with.
Now, all of a sudden there is a new corollary that I hadn't considered. In fact, it's a consequence that could make the others pale by comparison. It's called collective bargaining.
This month the CAW will enter the first rounds of collective bargaining with the Big Three and already the rank and file have made it clear they want a piece of the action. Automakers will sing their same sad story about having nothing to share, but the exaggerated sales numbers they are all showing is going to come back to haunt them.
The CAW is savvy enough to know that now is the time to strike, both figuratively and literally and more than nine out of ten Canadian workers have said they are ready to picket. The issues are wage increases, paid time off, working conditions, benefits and job security. And don't underestimate for two seconds how hard the union will bargain on that last issue.
That's because historically, the bottom falls out of the new car market after it has had two record sales years (2000, 2001) and were it not for unprecedented incentives for the past 12 months, 2002 would probably have shown a substantial sales falloff. But automakers kept the euphoria going, which made them the darling of a struggling economy, only to become the targets of a union that knows that sales numbers might hit with a thud next year. That would mean massive layoffs, but not if the union crafts a well-written contract.
Choice of a strike target is also a strategic issue, but sales incentive leader GM looks like a limping gazelle to the predatory CAW negotiators. It also goes without saying that in the wings, the UAW is poised to ask for whatever concessions the CAW might get, making this one of the most critical contracts in history for all parties involved.
I'm not expecting the automakers to cave in easily either because they will probably have to weather bad times with this contract even though it will be forged in times of plenty. But if everybody plays hardball and a strike shuts down a number of plants, it could take an already fragile economy and push it over the edge. If that happens everybody loses.
Economically, the boat is still rocking and while multi-year labor contracts are the norm, I think today's conditions merit a long hard look at a one-year contract to make sure nobody gets hurt. At the bargaining table, the union and the automakers are coming from two different perspectives, but at the end of the day neither one is trying to exterminate the other.
Today's new vehicle sales environment may look rosy but make no mistake, it's an exaggeration of the facts. And coming from a dead man, that should speak volumes as to how wrong the facts can be.
[Author Affiliation]
Gerry Kobe is Executive Editor of Automotive Industries.
[Author Affiliation]
Share your thoughts and comments with Executive Editor Gerry Kobe by email. Write to: gkobe@aol.com
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