Canadian Auto Workers (CAW) a spin-off of UAW may be helping US-based auto workers. After the 2008 meltdown the CAW is left as a shadow of itself much like its former parent UAW. They are merging with Communications, Energy and Paperworkers to form a new union called Unifor.
The new head is expected to be a social activist long serving member of CAW Jerry Dias aged 54. the two unions are merging to bulk up, hoping the heft gives them negotiating power. The problem with Canadian Autoworkers is a persistently high Canadian dollar which has eroded many former cost advantages.
If they start to exert what they think is muscle watch for work to be transferred to US plants. Obama is backed by US not Canadian Unions. US car companies are beholden to Washington and not Ottawa. Many foreign plants are under construction. It’s only too easy to transfer work to US plants and throw a bone to politicians and appease the American unions.
George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti
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Canadian Auto Workers are negotiating for their new contract. 5 days to go and the sabres are rattling. They may select one of the big three in Canada for strike action. My prediction is Ford (NYSE:F).
General Motors (NYSE:GM) is still weak after their bail out and building plants in China. The big plant on Oshawa is on borrowed time and probably will close in a few years. In the meantime the Oshawa Works are a shadow of their former glorious past. GM is looking for reasons to padlock the place.
Chrysler is controlled by Fiat (LSE:F) which is run by the Agnelli family. The Agnelli family would just sip proseco and act like there was nothing wrong. Picket lines mean nothing. The Canadian Auto Workers would not know how to fight someone like the Italian Kennedy family.
lSo it would be Ford. Large presence. Public shareholders who would take pain. Just enough non government bailout fat to be abused. Like a shark to fresh red meat. Some unionists see the possibility for leverage.
But here are the problems. Managements are very aware of cost structures and the ease of moving offshore. So if its strike first be prepared for a long one with an eventual closure in favour of a right to work state or even something in an underdeveloped country that cannot spell mandatory union dues. Also Canadian foreign exchange advantages have long dried up. Canadian labour is very expensive.
George Gutowski writes from a caveat emptor perspective. Follow him on twitter @financialskepti
Caterpillar (NYSE:CAT) makes no bones about cost reduction. It will happen. The union representing workers at the London Ontario electro-locomotive plant stuck to the standard union script and dragged out negotiations. The contract came due Dec 31. Caterpillar was seeking significant concessions. The union got it wrong. The plant is now closed permanently. 400 blue-collar guys just lost good paying jobs.
Caterpillar has no choice. High cost producers do not survive. If unions insist on intransigent stupidity they will be cleaved off.
The union? Why its the Canadian Auto Workers (CAW) a spin of from United Auto Workers (UAW). the same union theat General Motors (NYSE:GM), Ford (F) and Chrysler (XETR:FIAT) have been dealing with. You would think auto worker unions would understand the need for cost control and productivity?
George Gutowski writes from a caveat emptor perspective.