Strike Against Chrysler May Be Imminent

Here we go again.  If no deal is in place by 11 a.m. Detroit local time today, 49,000 United Auto Workers could walk off 24 Chrysler sites across the United States.  The current UAW contract expired on September 14th, but the union agreed to extend the deal and bargain with General Motors first.

Chrysler LLC may not have the same bargaining power it had when it was merged with Daimler-Chrysler.  Being backed by private equity firm Cerebrus Capital Management makes Chrysler a much smaller company than it was previously.  The company makes less than one million cars domestically per year.

This fact has Chrysler in a bit of a tough spot at this moment in time, when the three major U.S. automakers - Chrysler, Ford, and GM - have less than 50% of the market share in the states.  Chrysler alone lost $1.5 billion in the first three months of 2007 while still under Daimler ownership.  The automaker also saw a 3% drop in sales for the third quarter of 2007.

At what is clearly a hard time for Chrysler to weather a strike, union negotiators sent a memo to local union leaders advising them that UAW would no longer extend its contract with Chrysler.  Labor workers have essentially been working out of contract there since 11:59 p.m. Tuesday. 

UAW President Ron Gettelfinger is towing the same line against Chrysler as he did against GM.  "The company has thus far failed to make an offer that adequately addresses the needs of our membership,'' UAW President Ron Gettelfinger and the UAW's chief Chrysler negotiator, General Holiefield, said in Monday's joint memo.

A Chrysler spokeswoman did confirm to the Associated Press that negotiations continued throughout the night, and were ongoing.

Chrysler is seeking similar health care concessions the UAW gave to GM and Ford over the last two years.  Chrysler is also trying to lower the number they would have to pay into a retiree health care trust fund run by the union, effectively taking those high costs off Chrysler's books.  UAW negotiated a similar deal with GM last month.  Chrysler has 78,000 retirees and spouses, compared to 340,000 at GM.

UAW also wants job security written into the deal, guaranteeing certain plants and factories will continue to build future Chrysler products.  Chrysler is also looking to buy out high-wage union members responisble for parts transportation, handing that role over to a contractor, according to the AP.

As a private company, it is clearly advantageous for Chrysler to try to reduce labor costs without a long strike, but how long of a strike they can deal with is up for speculation.

Analysts say Chrysler, which has a 71-day supply of cars and trucks, may even benefit from a short-term strike, where the company would surely offload a percentage of their high inventory.

But National Automobile Dealers Association economist Paul Taylor told the AP that a month-long walkout would erode Chrysler sales when the Aspen and Jeep Wrangler are selling well.

If the 11 a.m. deadline does come-and-go, it is possible for the union to extend the current contract without a walkout on an hour-by-hour basis.  UAW leaders did this for nine straight days while dealing with GM.  But if talks begin to stagnate, and negotiators begin butting heads with Chrysler management, a strike will become likely.

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Source: www.worldcarfans.com

MSNBC reports that the United Auto Workers (UAW) have just walked out on Chrysler. Given that the UAW strike over at GM lasted the smaller part of two days and resulted in an agreement that gave the automaker pretty much everything they wanted, don't look for much hand-wringing excitement in this latest action against Chrysler for at least a week. By then we should know what gives, or more, precisely, who gives what. Is the UAW using the strike to soften-up 49k Chrysler workers for GM-like givebacks, or is this the real deal: an American automaker drawing a line in the sand? The fact that Cerberus, Chrysler's new master, is a privately-held company looking to strip and flip changes the fundamental dynamic considerably. Or not. In any case, once again, the union bosses aren't sayin' notin' to no one as to why they walked: “The company has thus far failed to make an offer that adequately addresses the needs of our membership,” UAW President Ron Gettelfinger said on Monday. So now you know.

MSNBC »

Source: www.thetruthaboutcars.com

The American automotive market offers just three inline six (I6) engines. First and foremost: BMW's 3.0-liter unit. Devotees will find the propeller people's sublime I6 in the 328i and 528i, and in turbocharged form, in the 335i and 535i. Otherwise, there's GM's excellent 4.2-liter I6 found in the Trailblazer, Envoy and Saablazer 9-7x. And don’t forget Volvo’s new 3.2 and 3.0L I6 engines, used in the 2008 V70/XC70/S80/XC90 and the baby Land Rover. These sweet, smooth, silky engines are all that's left of a once-proud breed. The GM engine will probably die along with its host SUV in a few years, just as Jeep dropped its 4.0-liter inline six with the passing of the Wrangler. Mercedes ditched its straight six over a decade ago. Jaguar used to sell a six cylinder inline engine in the classical XJ6. And of course there were three outrageous examples from Toyota: the 4.5-liter straight six in the Land Cruiser and two different 3.0- liter six pots holstered by the Cressida, Supra, Lexus SC300 and IS300. Why has the I6 gone by the wayside? Lots of reasons. A V6 is a lot more compact, and most manufacturers use engines across their entire brand lineups. That means a modern V6 engine has to fit both transverse and longitudinal applications; Nissan, Toyota, GM, VW/Audi twist their V6s by 90 degrees. Hopefully the future will hold more I6 engines, if only because they tend to be so full of character, well balanced and smooth. Until then, you can pick up your own straight six on the cheap in a used Suzuki Verona (which even mounted it transversely).

[Click here for the technical differences between I6 and V6 engines]

Source: www.thetruthaboutcars.com