80,000 Strike Chrysler Plants : Union, Company at Odds on Wages, Job Security
About 80,000 union workers in the United States and Canada went on strike against Chrysler at midnight Tuesday, after bargainers for the United Auto Workers and Chrysler in both countries failed to reach agreements on new contracts, UAW officials announced just minutes after the strike deadline passed.
Union officials said that two of the key issues in the talks--wage hikes and job security for union members--remained unresolved.
“I deeply regret that I have to announce that the UAW has been forced to strike Chrysler here in the United States at 12:01,” UAW President Owen Bieber said. “We believe every avenue has been explored and every alternative examined. Both sides have worked hard to try to resolve our differences, but the gulf separating us on key issues is simply too great to bridge at this point.”
The UAW called the nationwide strike by its 70,000 members in the United States against the No. 3 auto maker just as the old contract expired at midnight. Negotiators for Chrysler and the Canadian UAW, which is independent from the American union, also failed to reach an agreement late Tuesday, and Chrysler’s 10,000 Canadian workers walked off their jobs Tuesday night as well.
Chrysler’s chief bargainer said the two sides were close to agreements in both countries before the unions walked out. “This is a strike that should not have happened,” said Thomas W. Miner, Chrysler’s vice president for industrial relations. “In our opinion, we walked our half of the way.
“We hope this is a short strike,” he added. “Neither the company nor our employees can afford a long strike. But if we can’t get it over soon, it won’t be the fault of the company.”
Bieber said that some progress had been made in the talks, but added that a number of key issues--including wages and job security--remained unresolved. At midnight, he said the two sides were breaking off talks for the night, but would resume negotiations this morning.
Strike’s a ‘Shame’
Miner was bitter about the union’s decision to strike. “We think it is a damn shame . . . but here we are,” he said. He added that the company tried to talk the union into continuing to negotiate without striking, but the union refused.
Earlier on Tuesday, however, it appeared that a strike might be averted at least in Canada, following the union’s upbeat reaction to a company offer to match the higher wages and benefits paid by the Canadian operations of General Motors and Ford--meeting the union’s demand for wage “parity” in the auto industry.
Miner also said he thought that a few more hours of late-night bargaining in both countries could have averted the walkouts.
“We had parity on the table in Canada when the strike happened there, and we were well on the way to an agreement here that would have provided parity here with GM and Ford,” Miner said.
But union officials stressed that the company’s proposals in both countries still fell short of their economic demands.
Recouped Concessions
Union workers at Chrysler have, in recent rounds of bargaining, recouped most of the wage concessions they granted Chrysler during its bout with bankruptcy five years ago, and base wages at Chrysler now average just 6 cents per hour below those paid at GM and Ford in the United States. (Base wages and cost-of-living adjustments average $13.23 per hour for assembly line workers at Chrysler, while GM workers earn an average of $13.29 per hour.)
But GM and Ford workers also get annual profit-sharing bonuses while Chrysler workers do not, and GM workers just received additional lump-sum payments for 1985 ranging between $600 and $700 that come in lieu of further base wage increases. A number of other fringe benefits--including pensions and overtime rates--are better at the Big Two than they are at Chrysler.
As a result, the UAW’s top priority in the negotiations has been to force Chrysler to match the contract pattern--set at GM and Ford last year--across the board. And, in order to gain more bargaining leverage against the auto makers and to play one against the other by re-establishing the tradition of “pattern bargaining” in the auto industry, the union also wants to make the new contract a two-year agreement, so that it will expire in 1987--at the same time as the union’s current pacts with GM and Ford.
But Chrysler has so far resisted the union’s demands for full parity in the United States. Chrysler has also so far refused to agree to the union’s demands that it limit its purchases of foreign components for its cars. Chrysler currently only makes about 30% of the parts for its cars, subcontracting the rest out to domestic and foreign suppliers. Earlier this year, the company announced plans to triple its imports of Japanese cars, and it has also made it clear it intends to dramatically increase its purchases of parts built in Asia.
Company’s Demands
Meanwhile, the company has made its own demands for streamlined union work rules to increase productivity. The company also would like to reduce the number of job categories it has in its plants so that skilled workers can perform a wider variety of tasks.
A lengthy strike could have a devastating impact on Chrysler’s financial health. Harvey Heinbach, automotive analyst with Merrill Lynch in New York, estimates that a strike in both countries would cost Chrysler about $50 million a week in lost profits. He added that the auto maker will lose the production of roughly 35,000 cars and trucks each week as well.
