Union OK’s new contract with Chrysler
Thursday, October 27, 2011
DETROIT (AP) — Members of the United Auto Workers union approved a new four-year labor contract with Chrysler on Wednesday, though many voted against the pact.
Overall, about 55 percent of workers casting ballots voted for the contract and 45 percent opposed it.
Salaried and production workers across the U.S. favored the deal, but skilled trades workers such as electricians and pipe fitters voted it down. So under the union’s Constitution, the executive board made the final decision to ratify the pact.
The approval means that all three Detroit automakers have signed deals with the union and labor peace is likely at least through September of 2015.
Under the deals, most workers at Chrysler, Ford and General Motors won’t get pay raises. But they’ll get signing bonuses, profit sharing and other payments. The deals also promise at least 13,000 new jobs at all three companies and give raises to a entry-level workers who make about half the pay of longtime UAW members.
About 56 percent of skilled trades workers voted against the contract, forcing the executive board to review the deal. The board, meeting by teleconference on Wednesday, declared the contract ratified after determining that skilled trades workers voted against it mainly for economic reasons that weren’t unique to their jobs.
Under the Constitution, skilled trades issues can be separated from the rest of the union, but only if the issues are specific to their work.
“Skilled trades can’t override production,” UAW President Bob King said.” It’s whatever the majority votes on the overall contract, the overall economics of the contract.”
The union and Chrysler reached a tentative agreement on the new contract Oct. 12, and Chrysler Group LLC’s 26,000 union workers finished voting on the deal Tuesday night.
The Chrysler deal includes a $3,500 signing bonus, and its profit-sharing checks are far lower than workers will get at Ford Motor Co. and General Motors Co. Ford’s signing bonus is $6,000, while GM’s is $5,000. Chrysler Group LLC has yet to make a full-year profit since it emerged from bankruptcy protection in 2009, while GM and Ford have each made billions. Chrysler needed $12.5 billion in government loans to survive bankruptcy.
The union was hampered in negotiations because it was barred from striking over wages under the terms of the company’s 2009 government bailout.
Chrysler hasn’t made an annual profit since 2005. The company earned $116 million in the first quarter, its first quarterly net profit in five years. But it lost $370 million in the second quarter, mostly because of charges for refinancing government debt. The company is likely to announce a third-quarter profit when it reports earnings on Friday.
Chrysler expects to earn $200 million to $500 million this year, excluding the debt charges. But the profit is tiny compared with its Detroit rivals. Ford reported a profit of $6.6 billion last year, while GM earned $4.7 billion.
The Chrysler deal promises up to 2,100 new jobs and investment of $4.5 billion in U.S. factories.
King said Wednesday that he doesn’t expect any backlash from skilled trades workers in Chrysler factories, but he conceded that many workers are unhappy with the contract.
“Money was a big, big issue, especially because they saw their sisters and brothers at GM and Ford getting a lot more,” King said.
The union’s top priority in the bargaining, King said, was to gain investment and jobs while protecting the companies’ financial viability so they could make the investments.
The contracts, reached without strikes or arbitration, should help the union in its efforts to organize workers at U.S. factories owned by foreign automakers, King said.
The UAW has made progress with the companies in confidential discussions, he said, but he would not identify which company the UAW will focus on first.
Chrysler said in a statement that the deal will let hourly employees share in prosperity when Chrysler achieves it.
“No one involved in the bargaining process leading to this agreement could forget about our near-death experience slightly more than two years ago,” CEO Sergio Marchionne said.
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