Chrysler CEO Sergio Marchionne with UAW President Bob King seen earlier this year.
Working well into the night, Chrysler and United Auto Workers Union negotiators hammered out a new contract for 26,000 hourly employees – nearly a month after the maker’s original labor contract was set to expire.
The deal makes the conclusion of this year’s round of bargaining for the Detroit makers – contract talks considered crucial to both labor and management. Significantly, the talks steered clear of the angry rhetoric and confrontations that had seemed a traditional part of bargaining for the domestic manufacturers.
While specific details of the Chrysler contract have yet to be released initial indications are that the settlement follows the pattern set last month by the UAW’s contract with General Motors, which would include a small “signing bonus,” improvements in profit sharing, some inflation protection and a modest increase in wages for new workers hired into a lower second tier.
But, notably, there will be no increase in base wages for its hourly workers. And, overall, Chrysler is likely to have accepted little of an increase in its overall labor costs, which averaged just over $50 an hour going into this round of talks.
Meanwhile, as at GM as well as Ford, Chrysler is expected to come away with union-authorized improvements to its productivity efforts. Those measures were considered significant enough that ratings agencies Moody’s and S&P upgraded General Motors and are expected to give Ford a much-needed upgrade, as well, if its tentative contract is ratified – as union leaders anticipate.
Chrysler’s settlement has taken a bit longer to reach than anticipated. In fact, it initially appeared likely it would be the first maker to come up with a new 4-year agreement. But in the hours before the September 14th deadline a snag set in and UAW leaders decided to focus on GM. That drew an angry written rebuke from Chrysler CEO Sergio Marchionne.
But what could have become a nasty public squabble quickly cooled off – perhaps because the UAW was prohibited from striking under the terms of the 2009 federal bailout that saved the maker after it emerged from Chapter 11 protection.
Some observers thought a settlement would be reached this past weekend, after local union leaders from Chrysler plants all over the U.S. were summoned from Detroit – but it appears the final terms were delayed as the maker continued to demand that any increase in one column of the new contract be offset by cuts elsewhere.
The union is expected to quickly outline the terms of the agreement after meeting with those local officials now in Detroit, a ratification vote set to follow.
With contracts in hand for all three makers, UAW President Bob King is expected to next focus his efforts on trying to organize the mostly non-union “transplant” assembly plants operated by makers like Toyota, BMW and Hyundai that now dot the American landscape.
I’ve been waiting for the day a truly concerted effort was made by the UAW in trying to organize the transplants. I’ve told anyone within earshot that I believed in the UAW and that they would finally organize the transplants, because the transplant workers would eventually see what they were losing by not being part of the UAW. But after the failure of Democrats to push the Employee Free Choice Act, and now the failure of the UAW to offer any true enticements that I think would encourage workers at the transplants into wanting to pay union dues, especially among the older work force that would be potential retirees, it seems to me that the UAW is still a great distance from any new organizing in the auto industry. I can hear it now from the South: “The UAW still let wage packages slide to what we make down here” or at best “We at the transplants have never had it so good, and if we join the union we’d have to shell out two hours of our pay a month in union dues just to keep what we already have.” And potential retirees at the transplants surely noticed that there was not even a thank you note to the hundreds of thousands of present UAW retirees, and that those retirees were virtually forgotten, at least up until this point. If Bob King wanted contracts that he could take to Honda, Toyota or the new VW workers that would be enticing, I don’t think that is what he ended up with. I’m just praying Ford will at least ratify their contract on the first vote, and without having to offer up some more bonus money to “buy off” the skilled trades guys in order to get enough of their votes to ratify the contract, like I saw happen at my plant many years ago. The contracts were probably the best King could have gotten for the active employees, and not bad, but I don’t see the contracts offering our southern friends a whole lot of enticements, and the contracts certainly wouldn’t offer potential retirees of the transplants anything. In that I am extremely disappointed.