The United Auto Workers gave Chrysler L.L.C. similar contract concessions to
those given General Motors Corp., but it received less in return.
On Wednesday, October 10, the UAW reached a tentative agreement with Chrysler on a new
four-year contract after a six-hour strike. The deal must be ratified by about
45,000 Chrysler workers represented by the UAW.
Unlike GM, Chrysler did not make specific future product commitments plant by
plant, say sources familiar with the agreement.
The UAW did not end a two-day strike against GM last month until it received
detailed plans for new products launching as far out as 2013.
Most of the rest of the contract was patterned after GM’s. The contract calls
for a Chrysler-financed retiree health care trust that would be controlled by
the UAW. Provisions would allow Chrysler to permanently unload about $18 billion
of retiree health care obligations for about $11 billion. The annual savings —
and the financing sources for the fund’s underwriting — have not been
disclosed.
GM agreed to an even larger health care trust in a contract that was
overwhelmingly ratified by UAW rank-and-file on Wednesday, October 10. To fund a voluntary
employee beneficiary association with the UAW, GM will pay about $29.9 billion
to hand over future retiree health care liabilities of about $50 billion.
Neither Chrysler nor the UAW is commenting on details of the agreement.
The UAW will begin its final negotiations with Ford Motor Co. in the coming
days.
At Chrysler, the UAW also agreed to a new-hire wage and benefit package for
nonproduction jobs. Under the terms at both GM and Chrysler, hires would receive
about half the $28 an hour wage to replace veteran workers who are expected to
receive another incentive package to retire or take a buyout to leave, the
sources said.
As with the GM deal, Chrysler workers will receive small annual bonuses
during the life of the contract instead of a wage increase. Assuming the
agreement follows the GM agreement, workers would get a $3,000 signing bonus the
first year plus annual lump sum bonuses of 3 percent, 4 percent and 3 percent
during the last three years of the contract.
Analysts say the deals will help GM and Chrysler shrink considerably a
$20-$30 an hour labor cost gap with their Japanese competitors in the United
States. The new GM contract covers about 73,000 active hourly employees.
—David Barkholz
Filed by David Barkholz of Automotive
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