Chrysler, UAW Agree on New 3-Year Pact : Labor: The No. 3 auto maker accepts the basic pattern contract the union negotiated at Ford Motor Co. GM is next.
About 6,000 anxious Chrysler Corp. workers walked picket lines for a few hours early Friday before company and United Auto Workers bargainers settled on a new three-year agreement.
The scattered job actions ended quickly when word got out that agreements had been reached on contracts covering 54,000 hourly and 6,000 salaried workers.
“It went real well and was very orderly,” said Bill Lee, president of UAW Local 371 in New Castle, Ind.
Tom Gallagher, Chrysler vice president of employee relations, said the No. 3 auto maker agreed to the basic pattern contract the union negotiated at Ford Motor Co. two weeks ago.
The UAW next week moves to General Motors Corp., the last stop in its triennial bargaining ritual. Many expect talks at GM to be the toughest of the Big Three because, unlike Ford and Chrysler, GM is cutting jobs and closing factories.
That makes the agreement a tougher sell. The deal tentatively agreed to at Ford and Chrysler calls for:
* A 3% wage increase in the first year of the contract, followed by lump-sum bonuses equal to 3% in the second and third years.
* Continuation of fully paid health benefits with no new co-pays or deductibles.
* Improved pension benefits for workers who retire after 30 years of service. The monthly payment increases to $2,030 at the end of the new contract, compared to the current $1,800.
* A lower starting wage for new hires. They will start at 70% of the top wage and reach parity with current workers in three years. Under the old contract, new hires started at 85% of the top wage and reached parity in 18 months.
The costs of the health care benefits and higher pensions are negatives for GM, while the lower starting wage is moot because the world’s largest auto maker is unlikely to hire many new workers during the life of the contract.
GM and the union are believed to be working on an early-retirement program that would allow GM to cut its work force faster. An incentive-sweetened early-retirement package earlier this year led 16,500 hourly workers to leave.
However, in exchange for selling another early-retirement program to its 241,000 members at GM, the UAW is expected to demand that the company go along with the rest of the pattern.
At Chrysler, the biggest issue was how much work the company contracted with outsiders.
Chrysler stock gained 87.5 cents to close at $48.875 in heavy trading. Investors were apparently relieved that the company will be able to keep building its hot-selling Jeeps, minivans and mid-size sedans.
