The Chrysler Deal

Chrysler is about to be reorganized, going from an essentially privately owned firm to a firm owned by a combination of private firms, its employees and the federal government, with the UAW controling 55% of the pie. The actual compensation of the ownership has not yet been released and will be interesting. The last obstacle to the deal seems to be a ratification vote and an agreement by all bondholders to take less than face value (as compared to the zero they would get if the company failed).

This was actually the easy part. The hard part is how this new firm will getting people to buy cars again and as importantly how the firm will be managed. The new firm will learn about quality and participative management from Fiat, which is a good sign from my anarcho-synidicalist viewpoint, since European participative management will impact the day to day functioning of Chrysler in a way that will reduce both cost and increase human dignity. The impact of that may well be less of a need for governmental regulation. The anarcho part of me likes that a lot.

The acid test will be how profit, wages and positions are divied up. If Chrysler is run the way United is run, the experiment will be a flop. If it is run along different social assumptions, however, it may well make it, although it is a hard row to hoe. it is not easy to move from a top-down hierarchy locked in a death match with a top-down union to a more economic and egalitarian model. I have a few ideas along this line. Anyone in either management or the Union who is interested in these is free to contact me. They are laid out on my Iowa Center for Fiscal Equity web page at www.geocities.com/iowaequity/governance.html and the companion piece at www.geocities.com/iowaequity/payequity.html.