UAW local chiefs OK deal with Chrysler
Louis Aguilar / The Detroit News
United Auto Workers leaders on Monday approved a tentative four-year labor pact with Chrysler LLC, paving the way for 45,000 autoworkers to vote on the landmark deal.
Though the voice vote of local presidents was clearly in favor of the deal, it was not unanimous, as it was when UAW leaders took the presidents' vote on the General Motors Corp. deal about two weeks ago.
Some UAW leaders said they would urge members to reject the Chrysler pact because of its weak job security guarantees and two-tier wage system. With the new contract, Chrysler is looking to cut a $28-per-hour labor gap with foreign rivals led by Toyota Motor Corp.
The tentative deal reveals that two Metro Detroit facilities will close before the contract expires in four years, according to a UAW summary provided to union leaders. The closures of the Sterling Heights Vehicle Test Center and the Conner Avenue Assembly in Detroit, which makes the $80,000-plus, low-production Dodge Viper, will impact 350 workers.
Spokesperson Michele Tinson said Chrysler couldn't comment on plans for the Viper.
The Chrysler deal follows the same landmark pattern that GM workers ratified last week. It includes the creation of a union-controlled fund for retiree health care, into which Chrysler will pump $10.3 billion; the creation of a two-tier wage system; and what the UAW described as "unprecedented product and investment commitments," including $15 billion in new investment.
UAW President Ron Gettelfinger and numerous other local leaders predicted workers will ratify the contract. "We want to try to get as many of the ratifications done by next Sunday as we possibly can, with the understanding that we know we have some facilities shut down and that may create a delay, but we are going to try to get it done, as many as we possibly can," Gettelfinger said as he walked among the hundreds of UAW officials who had gathered at Cobo Center in downtown Detroit on Monday afternoon for an informational meeting. Earlier in the day, local presidents had their voice vote on the deal.
He said he would be pleased if two-thirds of Chrysler workers approved the deal. The GM-UAW contract got 66 percent approval from workers.
Some product commitments
The UAW summary obtained by The News appears to show seven plants with product commitments that ensure they will stay open for several years, including the Detroit's Jefferson North, Warren Truck and Mount Elliot Tool and Die. Jefferson North will produce a future version of the Jeep Grand Cherokee and Warren Truck will assemble a new Dodge Ram pickup to be launched in 2008.
Also, a machining plant employing 1,500 near Toledo, Ohio, was removed from Chrysler's closing list.
But the summary also appears to show 14 facilities with no new product commitments, including Sterling Heights Assembly and St. Louis South Assembly.
That sparked an outcry by some UAW members, including national bargaining unit member Bill Parker, who urged leaders to vote no.
"Virtually no Chrysler plant received commitments beyond the scope of their current product," Parker wrote in a leaflet he distributed to the local leaders who make up the Chrysler national bargaining council. "As a result, the plant-by-plant threats we've experienced in the past will continue."
Chris Steward, who works in skilled trades at Chrysler's Kokomo, Ind., plant, said he had concerns about the two-tier wage system. "You'll have someone working next to you that's making half what you make. That's not fair and it's going to cause problems."
Steward said he's likely to vote against ratification.
Parker also attacked the two-tier, "noncore" status for workers who will start as low as $14 an hour and get a 401(k) plan instead of retiree health care benefits. He contends that four facilities will be solely "noncore" once current workers retire. That includes a future axle plant in Marysville.
But some analysts say Chrysler's owner, Cerberus Capital Management LP, is not in a position to make the same production promises as GM.
"This sounds like a realistic approach to the contract and not indicative that the UAW backed down," said David Cole, chair of the Center for Automotive Research, an Ann Arbor-based think tank. "Cerberus is a pure financial buyer of Chrysler. It's their goal to make Chrysler attractive for a strategic partner that will become more a manufacturing partner The lack of commitment beyond four years doesn't suggest anything to me."
Harley Shaiken, a labor professor at the University of California, Berkeley, also said it's unfair to compare Chrysler's pact directly with GM's.
"GM is much further along its restructuring program than Chrysler. So whether the percentage of commitment on the VEBA is different, or the fact that there are no product guarantees at plants after four years, it tells me they suited this contract to the specific needs of the company.
"Remember, this is a ground-breaking contract with many unprecedented provisions. An overwhelming approving by the (UAW) leaders still bodes quite well. With these kind of circumstances, any ratification is a good ratification. I think most expect a tougher vote than usual."
'I think it's a win-win'
Chrysler agreed to pay $10.3 billion to secure retiree health care, including $8.8 billion to fund a voluntary employees' beneficiary association, or VEBA, and $1.5 billion to pay the health care costs until the VEBA takes effect in 2010.
The meetings Monday cleared up how the VEBA will operate and other details for Jenson Dye, a PQI communicator at Chrysler's Jefferson North plant in Detroit. He said he will vote to accept the pact. "Once people get the details, they will support it," he said. "Their biggest fears are health care and wages, and this deal addresses that."
Dye was happy that he will continue to pay minimum out-of-pocket health care expenses. "We had to give up some things, and so did the company," he said. "But I think it's a win-win overall."
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Print | posted on Tuesday, October 16, 2007 12:44 PM