Feature

Strike ends quickly

Chrysler and the United Auto Workers reached a contract agreement six hours after the union launched a national strike. The walkout was just for show, said Micheline Maynard in The New York Times. Nobody can afford to fight with Detroit sliding toward &#0

What happenedChrysler and the United Auto Workers reached a contract agreement late Wednesday, just six hours after the union launched a national strike. Minutes after the deal was announced, the auto workers announced that they had ratified a contract with General Motors under an agreement that came after a two-day walkout.

What the commentators saidIs this Detroit, or Hollywood? said Micheline Maynard in The New York Times (free registration). Both strikes were apparently just for show. “The brief walkouts appear to have emerged as a way for both union leaders and company managers, at a time of deep troubles in their industry, to prove to their constituents that they got the best deal they could under the circumstances, without the damage of an all-out war.”

Details were scarce, said Daniel Howes in The Detroit News, but Chrysler’s new owner—private-equity firm Cerberus Capital Management—didn’t exactly “dig in.” Still, Cerberus won concessions on retiree health-care that should help reduce the costs that are crippling U.S. automakers. The union got more job security. “That it ended as quickly” suggests that both sides realize Detroit will “slide into a financial abyss” unless they stop fighting and start “charting a realistic course for the future.”

“Both sides had plenty to lose” by dragging this out, said David Kiley in BusinessWeek.com. Cerberus needs to keep cash coming to design new models, give its marketing a “makeover,” and buy time while it slashes expenses and fights to bring its labor costs down to a level competitive with Toyota. For Chrysler’s 45,000 hourly employees, the matter is simple. They can’t afford to lose their jobs.

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