Autoblog http://www.autoblog.com Autoblog http://www.blogsmithmedia.com/www.autoblog.com/media/feedlogo.gif Autoblog http://www.autoblog.com en-us Copyright 2009 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[REPORT: Fiat's Marchionne says Chrysler deal odds are 50-50; warns unions to cut costs]]>http://www.autoblog.com/2009/04/15/report-fiats-marchionne-says-chrysler-deal-odds-are-50-50-war/http://www.autoblog.com/2009/04/15/report-fiats-marchionne-says-chrysler-deal-odds-are-50-50-war/http://www.autoblog.com/2009/04/15/report-fiats-marchionne-says-chrysler-deal-odds-are-50-50-war/#commentsFiled under: , , , ,



With the clock ticking down on Chrysler's restructuring deadline from the Obama administration, Fiat's CEO, Sergio Marchionne is getting blunt: Cut costs, or else.

According to Reuters, unless the United Auto Workers and Canadian Auto Workers agree to cut labor costs within the two weeks leading up to the April 30 deadline, Fiat will pull out from its planned stake in Chrysler, all but assuring bankruptcy for the Auburn Hills automaker. In fact, in an interview with Canada's Globe and Mail, Marchionne estimated that the chances for a deal are only 50-50, saying "Absolutely we are prepared to walk. There is no doubt in my mind." Thus far, union representatives have been resistant to lowering labor rates to be more in line with that of Asian and European automakers.

In addition to labor cost issues, Chrysler has massive debt to contend with - some $7 billion is owed to lenders. If the company is to have any hope of making a dent in those obligations without seeking bankruptcy protection, it will need the to secure the second $6B tranche in government loans (it has already taken in $4B) that the White House says will only be offered if they come to terms on restructuring.

On the subject of the possibility of simply 'cherry-picking' from the bin of for-sale brands in the States as a way to re-gain entry into North America, Marchionne has reportedly been dismissive - particular of General Motors' Saturn division, about which he remarked: "It's not a brand I have any affinity for."

[Sources: Reuters; Automotive News (subs req.) | Image: AFP/Getty]

REPORT: Fiat's Marchionne says Chrysler deal odds are 50-50; warns unions to cut costs originally appeared on Autoblog on Wed, 15 Apr 2009 10:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>breakingbreaking newsBreakingNewsCAWChryslerFiatlabor costsLaborCostsMarchionneobama administrationObamaAdministrationSergio MarchionneSergioMarchionnetrancheUAWunionWed, 15 Apr 2009 10:00:00 EST<![CDATA[Rally 'round the family: Ford backs up Chrysler's "weak" assessment of new CAW contract]]>http://www.autoblog.com/2009/03/14/rally-round-the-family-ford-backs-up-chryslers-weak-assessm/http://www.autoblog.com/2009/03/14/rally-round-the-family-ford-backs-up-chryslers-weak-assessm/http://www.autoblog.com/2009/03/14/rally-round-the-family-ford-backs-up-chryslers-weak-assessm/#commentsFiled under: , , , ,



GM just ratified an agreement with the Canadian Auto Workers union, and as soon as it did, Chrysler blasted it for being "weak." Chrysler's complaint was that the CAW didn't offer enough concessions to bring production costs into line with market realities. Now Ford has piped up in Chrysler's corner, saying "We believe the recently negotiated agreement between General Motors Canada and the Canadian Auto Workers will not keep Ford's Canadian operations competitive in today's global economy."

Ford's Canadian labor costs per hour are supposed to be $70 Canadian, about $55 in U.S. dollars. Even though that is the amount that Ford recently just got its American labor costs down to, the company says it will need more savings from up north. GM, which hailed the agreement as promising, hasn't commented on its competitors' assessments, and neither has the CAW.

[Source: Auto News, sub req'd]

Rally 'round the family: Ford backs up Chrysler's "weak" assessment of new CAW contract originally appeared on Autoblog on Sat, 14 Mar 2009 12:32:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>canadacawcontractsearningsfinancialsfordlaborlabor costsLaborCostsplantsunionunionsSat, 14 Mar 2009 12:32:00 EST<![CDATA[Toyota worried about labor costs in U.S.]]>http://www.autoblog.com/2007/02/09/toyota-worried-about-labor-costs-in-u-s/http://www.autoblog.com/2007/02/09/toyota-worried-about-labor-costs-in-u-s/http://www.autoblog.com/2007/02/09/toyota-worried-about-labor-costs-in-u-s/#commentsFiled under: , ,

Here's something you might have seen coming. We've talked about how labor costs have been one of the major factors cited as keeping the domestic automakers behind the 8-ball regarding profitability compared to Japanese competitors. Sure, there's more to it than that, but the fact remains that labor costs are high on the list. How does that effect foreign automakers that have domestic workforces? About how you'd expect. Toyota, for one, is warning that U.S. labor costs could severely curtail their profits in the not-too-distant future.

Continues after the jump

[Source: Freep]

Continue reading Toyota worried about labor costs in U.S.

Toyota worried about labor costs in U.S. originally appeared on Autoblog on Fri, 09 Feb 2007 17:28:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Detroit Free PressDetroitFreePresslabor costsLaborCostsSeiichi SudoSeiichiSudoUAWFri, 09 Feb 2007 17:28:00 EST<![CDATA[The other shovel that helped dig the domestics' hole]]>http://www.autoblog.com/2007/01/27/the-other-shovel-that-helped-dig-the-domestics-hole/http://www.autoblog.com/2007/01/27/the-other-shovel-that-helped-dig-the-domestics-hole/http://www.autoblog.com/2007/01/27/the-other-shovel-that-helped-dig-the-domestics-hole/#commentsFiled under: , , ,

So how exactly can a company with the heritage and scope of Ford Motor Company manage to lose $12.7 billion in one year? Or, for that matter, how could GM lose $10.6 billion last year? All while Toyota continues to soldier on, racking up profits and closing in on number one. Well, it's more involved than most people realize. Sure we can gripe about product and quality all day long, but as CNN tells us, there's a lot more to it than that. Using a report by the Detroit consulting firm of Harbour-Felax, they paint a pretty bleak picture for the domestics. Some of the numbers in the findings are staggering.

Domestics trail the Japanese by $2900 in per vehicle profit. The main reason there's such disparity is labor costs. Sure we've been hearing that line for a while, but check out the data supporting it. Health care alone accounts for $1,635 per vehicle for GM. That's how much they spend on every active AND retired worker. Toyota on the other hand doesn't have many retired workers, doesn't spend a dime on them, and only pays about $215 for health care for active workers. Add to that the $630 per vehicle GM spends on other union related costs like work rules, line relief and holiday pay, plus the $350 per vehicle pay UAW workers get for not working when plants are shut, and you start to see where part of the problem lies.

We highly recommend reading the whole fascinating story on the other side of the read link.

Thanks for the tip, Stedwoo!

[Source: CNN Money]

The other shovel that helped dig the domestics' hole originally appeared on Autoblog on Sat, 27 Jan 2007 14:07:00 EST. Please see our terms for use of feeds.

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