‘Meet the new board of directors’ was the headline in the Globe and Mail above a photo of Chrysler workers in jeans and t-shirts. As part of a rescue plan, the United Auto Workers (UAW) will obtain 55% of Chrysler shares and a seat on the board in exchange for lower pay and less generous benefits. Some describe the deal as a major victory for the union, whereas the Financial Times describes it as ‘less a victory than a coming-to-terms with reality’.
In what many consider as a highly unusual deal, the union has become a partner in a government-supported plan to revive Chrysler after bankruptcy. The New York Times observes that the UAW membership at the Detroit car factories has shrunk to a quarter of what it was in 1990, but that it still has ‘tremendous influence’ in Washington, partly because of its ‘heavy political contributions’.
According to the Financial Times, the influence of the union on the company will remain limited and it will likely be ‘less confrontational at the board table than at the negotiating table’, if only because as a shareholder, it will have an interest in making the company profitable.