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New UAW-Chrysler Labor Pact Has No-Strike Clause

The Detroit automaker has extended its contract with the union, according to documents filed Wednesday, May 13, in U.S. Bankruptcy Court in New York. The extended contract includes a binding arbitration clause.

May 14, 2009
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The United Auto Workers has agreed not to strike Chrysler until September 2015.

The Detroit automaker has extended its contract with the union, according to documents filed Wednesday, May 13, in U.S. Bankruptcy Court in New York. Chrysler filed for Chapter 11 reorganization on April 30, and seeks to sell its valuable assets to a new automaker run by Fiat.

The contract, approved April 29, extends the UAW’s 2007 Chrysler agreement to September 14, 2011. From that date until September 14, 2015, any changes to labor agreements will be determined by binding arbitration.

Bloomberg News first reported details of the UAW agreement.

The contract says the UAW had agreed to accept $4.59 billion in cash plus a 55 percent stake in the Chrysler-Fiat partnership in place of the $10.6 billion that Chrysler owes a union retiree health care fund. .

Chrysler’s 26,000 U.S. hourly workers ratified the contract changes by a ratio of 4-to-1.

Fiat’s initial 20 percent stake would rise to 35 percent after meeting three milestones for bringing its vehicle technology to the United States.

The U.S. Treasury Department will maintain a 10 percent stake in the new Chrysler.

The health care fund, or voluntary employee beneficiary association, will nominate one Chrysler board member approved by the UAW, the contract says. Independent directors will vote the VEBA’s Chrysler shares.

The agreement also confirms an April report by Automotive News that all new workers Chrysler hires until September 14, 2015, can be paid entry-level wages.

The contract also reduces benefits, combines job classifications and creates stricter attendance rules. It says the company intends to persuade an additional 3,500 workers to leave voluntarily.

In an e-mail, a Chrysler spokeswoman declined to comment. A UAW spokesman did not immediately return a phone call and an e-mail requesting comment.


Filed by Chrissie Thompson of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com

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