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Chrysler Contract Ratified by U.S. Auto Union Members
By: Administrative Account | Source: Bloomberg
October 27, 2007 9:33PM EST


By Bill Koenig and Mike Ramsey

Oct. 27 (Bloomberg) -- Chrysler LLC won approval of its proposed contract with the United Auto Workers, shifting the union's focus to Ford Motor Co., the last U.S. automaker without a new labor agreement.

The vote was approved by 56 percent of production workers and 51 percent of skilled trades employees, according to a UAW statement. Ninety-one percent of office and clerical workers and 79 percent of union-represented engineering employees ratified the pact.

``Our members had to face some tough choices, and we had a solid, democratic debate about this contract,'' said UAW President Ron Gettelfinger in the statement.

The Chrysler accord, like an earlier agreement the union reached with General Motors Corp., calls for creation of a union fund to take responsibility for retiree health care. The agreements also call for lower wages for new employees. In return, the union received some guarantees of future work at UAW-presented plants.

For decades, the union insisted employers bear full responsibility for health care and has resisted multiple tiers of wages.

``We are pleased that our UAW employees recognize that the new agreement meets the needs of the company and its employees by providing a framework to improve our long-term manufacturing competitiveness,'' said Tom LaSorda, vice chairman and president at Chrysler, in a statement.

Ford Next

Balloting was completed at the final union local early today, 17 days after UAW and Chrysler negotiators reached the accord following a six-hour strike.

At Dearborn, Michigan-based Ford, Gettelfinger will try to model an agreement on the four-year Chrysler and GM contracts.

``The Ford negotiation is going to be significantly easier because I think the membership is aware of the gravity of the competitive issues that they face,'' said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan.

The UAW will negotiate with a company coming off a record $12.6 billion loss in 2006. The second-largest U.S. automaker announced plans last year to shut 16 of 41 North American factories.

Opposition

Ford, which has lost market share for 12 consecutive years, has identified only 10 of the plants, most of which will be shut by the end of 2008.

The ratification vote at Chrysler, the third-largest U.S.- based automaker, wasn't as smooth as at No. 1 GM.

Bill Parker, chief of the UAW committee that negotiated with Auburn Hills, Michigan-based Chrysler, opposed the agreement because Gettelfinger wasn't able to secure work as far into the future as he did at GM.

The union's four-year contract with GM calls for the Detroit-based automaker to put $29.9 billion into a retiree- health trust fund that takes effect in January 2010, according to a union summary. The deal with Chrysler will have the company spend $8.8 billion to finance a similar fund.

``With the support of our membership and local leadership, we have an agreement that secures jobs and wages and protects health care and pension benefits,'' said UAW Vice President General Holiefield, who heads the union's Chrysler Department, in the statement.

This year's labor talks were the first for Chrysler as a closely held company.

Chrysler is controlled by New York private-equity firm Cerberus Capital Management LP, which brought 80.1 percent of the automaker from the former DaimlerChrysler AG, now Daimler AG, in August.

To contact the reporter on this story: Bill Koenig in Southfield, Michigan, at wkoenig@bloomberg.net ; Mike Ramsey in Southfield, Michigan, at mramsey6bloomberg.net.

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