Chrysler and UAW Sign Two-Year Labor Contract
Chrysler Corp. and the United Auto Workers union Monday signed a two-year contract covering 66,000 U.S. hourly and salaried workers that returns Chrysler to the industry pattern for the first time since the firm was close to bankruptcy in the early 1980s.
Top union officials, led by UAW President Owen Bieber, and company executives headed by Chrysler Motors Chairman Gerald Greenwald inked the agreement at a ceremony at Chrysler headquarters that was far more cordial than the negotiations that produced the contract.
Agreement on the contract, which replaced one that would have expired Sept. 14, was reached during a set of early negotiations called by Chrysler in an effort to improve the strained relationship between the company and the union.
Workers had been angered by Chrysler’s plans, since delayed, to close its Kenosha, Wis., assembly plant and its efforts to sell its Acustar parts-making subsidiary.
The talks, in fact, almost broke apart amid Chrysler’s disclosure that it wanted to shift all production of the compact K-car to Mexico and news of the nearly $18 million received by Chrysler Chairman Lee Iacocca in 1987 salary, bonus and exercised stock options.
Narrow Margin of Approval
The new contract itself was approved by only 53% of Chrysler workers--a far slimmer margin than the union expected. Skilled trades workers, in fact, turned the contract down.
“This contract means all of us will be able to continue on and meet our goals of quality and productivity without any concern of a work stoppage that would have happened if we had worked up to the (Sept. 14) deadline,” Greenwald said at the signing ceremony.
“Could have happened,” interjected Bieber.
Both sides, however, pledged to work cooperatively in the future.
“We certainly hope we can have a positive relationship from this point forward,” Bieber said.
During negotiations, which concluded May 5, Chrysler estimated that by 1990 the contract will raise its hourly labor rate to $34--highest in the industry. But Anthony St. John, Chrysler vice president for human resources and its chief bargainer, said he was confident there would be sufficient improvement in productivity under the contract so that Chrysler would not be in a detrimental position.
“All of us realize that we are in a very competitive ballgame in the future,” St. John said. “We want to make sure that we stay competitive in that ballgame.”
Equivalent Wages
The contract, which expires in 1990 along with pacts at the other Big Three auto makers, gives workers the same wages and benefits earned by their counterparts at General Motors Corp. and Ford Motor Co.
It is the first time the Chrysler workers’ contract has followed the industry pattern since 1980, when workers granted the first of two sets of concessions to help Chrysler avoid bankruptcy.
Unique to the Chrysler contract is a provision that prohibits payment of executive cash or stock bonuses in any year in which workers do not share in profits. The provision was a direct result of Iacocca’s hefty compensation.
UAW Vice President Marc Stepp, head of the union’s Chrysler department, said the provision made the contract historic.
“America demands not only of this corporation . . . but of all businesses to remove the disparity between what workers receive and what executives receive,” Stepp said. “This contract is a foot in the door. We will build on it block by block.”
Labor experts say it is likely that the UAW will try to achieve the profit sharing-bonus tie at GM and Ford, but they doubt that the idea will spread to other industries.
