Local Union Leaders OK Chrysler Pact

Local union leaders from Chrysler plants around the country unanimously approved the tentative contract between Chrysler and the United Auto Workers in a meeting here Thursday. They recommended that Chrysler’s 70,000 U.S. workers ratify the agreement this weekend in order to end the union’s nationwide strike against the No. 3 auto maker.

At a press conference following the meeting of the union’s 170-member Chrysler council, UAW President Owen Bieber predicted that the union’s rank-and-file members, who have been on strike since Oct. 15, will also support the new contract, which provides Chrysler workers with pay and benefits that equal or surpass those paid to union workers at General Motors and Ford.

Chrysler workers won’t return to their jobs until the agreement is ratified, however, so Chrysler’s U.S. plants won’t reopen at least until Monday. Chrysler’s 10,000 Canadian workers, who also went on strike last week, returned to their jobs last Monday after a separate Canadian settlement was reached on Sunday.

On Thursday, Chrysler council members almost all appeared pleased with the new contract, which was hammered out in a marathon bargaining session that ended early Wednesday.

“It is an excellent package,” said John Byers, a local union leader at Chrysler’s Belvidere, Ill., assembly plant. “The economic package is superior.”

In fact, the three-year contract, which was released in detail to the press for the first time Thursday, will be a lucrative one for Chrysler workers. It appears that Chrysler was forced to give in on most of the union’s major wage and non-wage demands in order to end the strike, which has been costing the auto maker about $17 million a day in lost profits.

Guaranteed Bonuses

The agreement provides Chrysler workers with guaranteed profit-sharing bonuses of at least $1,500 over the life of the agreement, even if Chrysler loses money during those years. It will also provide workers with immediate bonus payments of $2,120 in order to partially reimburse them for wage concessions that they granted Chrysler between 1979 and 1981, when the company was struggling to avoid bankruptcy.

“We were 100% successful” in winning an agreement that met the union’s demands for wage parity with GM and Ford and for bonuses to pay back Chrysler workers for their earlier concessions, Bieber said Thursday.

He added that the agreement “closes the door on the discussion of concessions” in the auto industry. Bieber said contract give-backs granted the domestic auto companies between 1979 and 1982 are part of “an era that’s behind us.”

Along with a 2.25% base wage increase in the first year and a 3% hike in the third year of the contract, workers will also receive a lump-sum payment, in lieu of a wage hike in the second year, equal to 2.25% of base wages.

Combined, the up-front pay-back for concessions, the profit-sharing bonuses and the lump-sum payment in the second year of the agreement will provide Chrysler workers with a total of $4,400 in cash payments in addition to their wage hikes during the three-year agreement. And, assuming a 4% annual inflation rate, they will receive another $5,650 in cost-of-living payments during the three-year period as well, the union said. Pension benefits were also improved.

Job Security Fund

The contract also calls for Chrysler to spend at least $170 million on a job security fund that will protect workers from being laid off as a result of Chrysler’s increased use of automation or imported components. It also places a moratorium on plant closings resulting from Chrysler’s purchases of parts from outside suppliers, and it establishes local union-management committees at Chrysler plants to study Chrysler’s purchases of outside parts.

Additionally, the contract calls for a role--which is left undefined--for the union in the planning for Chrysler’s Liberty project. Liberty, like General Motors’ Saturn program, is supposed to help Chrysler find a way to build small cars that are cost competitive with imports.

Chrysler also agreed to spend $18.5 million to fund joint union-management studies at selected facilities to help the plants find ways to become more productive and avoid being closed. But senior workers who still lose their jobs due to plant closings will receive at least 50% of their wages until they retire under a new guaranteed income program, similar to those in effect at GM and Ford.

But, despite the high cost of the agreement to Chrysler--company officials say it will increase Chrysler’s labor costs by more than $1 billion over three years--Bieber insisted that the contract will not make it more difficult to compete with the Japanese.

“With new facilities, technologies and innovations, the auto companies are doing very well, and they are turning handsome profits,” Bieber said. “They can afford to pay workers proper wages and benefits and remain competitive.”