UAW Ratifies Chrysler Contract

Oct. 27, 2011
However, skilled tradesmen rejected the pact by a wide margin, leaving the door open to potential trouble.

The UAW on Wednesday said its members have approved a new four-year contract with Chrysler.

A majority of UAW members at Chrysler Group LLC, the third-largest U.S. automaker, voted in favor of the tentative deal reached two weeks ago, the UAW said.

The vote, however, left the door open to potential strife at the automaker since a significant union constituency -- skilled tradesmen -- rejected the pact by a wide margin.

A majority of union members voted in favor of the contract, 55%, compared with 45% against.

But the union had to resort to a procedural maneuver after skilled tradesmen voted down their portion of the contract. The ruling is almost certain to trigger a backlash among skilled tradesmen who also were upset over changes in jobs classifications and work rules.

"With this agreement, we have made significant progress in times of economic uncertainty," said UAW Vice President General Holiefield.

"We were able to make headway in bridging the gap between the new-hire pay and that of the existing workforce, return some of the benefits that members previously gave up to help the company survive, and win new jobs and investment in UAW plants," he said.

The contract, which covers 26,000 employees at 48 Chrysler facilities in the United States, provides for the company to add 2,100 new union-covered jobs by 2015.

Agreement Parallels GM and Ford Contracts

The agreement at Chrysler parallels the UAW contracts with General Motors and Ford Motor Co., which included pay increases for new workers and bonuses for longer-serving employees to compensate for the loss of cost-of-living adjustments and automatic pay increases.

Economic improvements in the Chrysler agreement include a $3,500 ratification bonus and $1,000 in annual bonuses for performance and quality, in addition to a new, more transparent profit-sharing program and an "upside bonus" that will begin paying at the point Chrysler achieves financial stability.

The contract also provides for Chrysler to invest $4.5 billion in the production of new and upgraded vehicles and components in the next four years.

"Less than three years ago, Chrysler was teetering on the edge of bankruptcy as our nation was thrown into the worst economic crisis since the Great Depression," said UAW President Bob King.

King said the deal, coupled with new agreements at GM and Ford, will add more than 20,000 news jobs across the country.

The UAW, which began contract talks with the Detroit automakers in July, reached a deal with GM that was ratified in late September and another with Ford on Oct. 19.

The last time there were major contract talks with the automakers was in 2007. In 2009, unions made major concessions on pay and benefits to help GM, Ford and Chrysler reduce costs in a bid to weather a deep recession.

President Barack Obama's administration ended up rescuing GM and Chrysler, which emerged from government-structured bankruptcies. Ford was the only major U.S. automaker that did not seek a taxpayer-funded bailout.

Copyright Agence France-Presse, 2011

About the Author

Agence France-Presse

Copyright Agence France-Presse, 2002-2024. AFP text, photos, graphics and logos shall not be reproduced, published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. AFP shall not be held liable for any delays, inaccuracies, errors or omissions in any AFP content, or for any actions taken in consequence.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!