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Chrysler Buys Off UAW, Hurts It Competitive Position

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By Douglas A. McIntyre Published
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The new owner of Chrysler, Cerberus, made what looked like a very smart move. It will add $1.2 billion to the pension fund that covers workers. It also said that no job cuts were planned beyond those that DaimlerChrysler has already announced. With a new contract negotiation around the corner, the private equity firm has sent the message that it does not want to make war with the union.

The deal with the UAW may have taken them away as a roadblock to the deal, but it may put Chrysler at a competitive disadvantage over the next few years. Ford (F) and GM (GM) are likely to push hard for job and pension concessions in the upcoming round of negotiations. They have not "pre-negotiated" a deal favorable to the union because they needed help on a transaction.

If GM and Ford can improve their position with the UAW, they improve their manufacturing efficiency. Chrysler may have already given some of that advantage away.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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