DaimlerChrysler, UAW Agree on 4-Year Contract
DaimlerChrysler and the United Auto Workers agreed on a four-year contract that provides annual pay raises for the first time in 20 years, union officials familiar with the accord said Thursday.
The agreement would boost base pay for 70,000 DaimlerChrysler workers by 3% each year and includes a $1,350 signing bonus and heftier pensions, the officials said, speaking on condition of anonymity.
It would guarantee jobs for longtime workers while letting the No. 3 U.S. auto maker trim payroll as they retire.
It also would prohibit spinoffs, setting up a battle between the UAW and Ford Motor Co. over plans for a parts unit.
The union and the Stuttgart, Germany-based maker of Chrysler, Jeep and Mercedes-Benz vehicles announced the contract in a joint statement. Neither the company nor the union would elaborate.
The accord comes after two days of round-the-clock talks and sets the pattern that rivals Ford and General Motors Corp. will follow for 300,000 other workers. It comes as U.S. car and truck sales are forecast to break the record of 16.03 million, set in 1986, and reflects growing confidence that the industry has regained its competitive footing, analysts said.
“Detroit [labor] has been in a concessionary wage environment since 1979,” said Sean McAlinden, a University of Michigan labor analyst. “This means the concessionary environment is over.”
In the late 1970s, rising oil prices and Japanese sales gains prompted U.S. auto makers to begin staggering base-wage increases in some years with lump-sum payments in others. Before then, 3% annual raises were common.
Contracts covering 370,000 workers at DaimlerChrysler, GM and Ford were scheduled to expire at midnight Tuesday, though all received extensions. GM is expected to settle within days, while Ford, whose UAW relations have soured recently, will go last.
DaimlerChrysler has been eager to establish labor peace because it gets 60% of its profit from its U.S. factories.
UAW members at DaimlerChrysler plants nationwide are expected to be briefed in the next few days in preparation for rank-and-file voting that begins next week. The ratification process is expected to take about 10 days.
Under the old contract, DaimlerChrysler assemblers earn a base wage of $20.11 an hour. That will rise to about $22.63 in the last year of the new contract.
The accord followed brief walkouts Tuesday night by 15,000 UAW members at DaimlerChrysler plants in Missouri and Indiana.
DaimlerChrysler’s tentative contract expands an existing moratorium on plant closings to include spinoffs of any part of the company, including parts units, according to Roger Brown, president of UAW Local 550 at a DaimlerChrysler foundry in Indianapolis.
That could cause problems for Ford, which has been grappling with the UAW over the possible spinoff its Visteon parts unit, a move the union is concerned could cost jobs.
Even so, the plant-closing moratorium, first negotiated in 1987, wasn’t able to prevent several factory shutdowns.
