UAW leaders urge OK of Chrysler contract

There was some dissent and a lot of questions, but in the end, local United Auto Workers leaders voted to recommend approval of a new four-year contract with Chrysler that is similar to one ratified last week with General Motors Corp.

UAW President Ron Gettelfinger said the deal was approved overwhelmingly by voice vote among several hundred local union presidents and bargaining committee chairs. The vote clears the way for the union to present the pact to about 45,000 Chrysler workers covered by the contract. Balloting was expected to begin in the next day or two.

The deal would reduce what Chrysler says is approximately a $28-per-hour labor cost disparity with its Japanese competitors, though it was unclear just how big a cut it would make.

In the bargaining, UAW negotiators were able to fend off the company’s demand for $1.01 per hour in wage cuts and cost-of-living adjustment delays, according to a booklet summarizing the deal.

They also saved about 1,500 jobs at a machining plant that was scheduled to close in Toledo, Ohio.

But 14 of 21 factories listed in the booklet would have no products to make after the current product life cycle or the life of the new contract. Seven others were to get future production.

The deal also includes a lower-tier wage scale for newly hired “noncore” employees who do not build vehicles or manufacture parts. The lower tier starts at about $14 an hour; it does not affect the pay of current workers doing noncore jobs.

Like in the GM deal, the union won a moratorium on plant closing and outsourcing. The outsourcing ban on noncore work will save 8,000 jobs, the booklet said.

“It was not unanimous but it was a big vote for it,” said Ross Rushing, a shop committeeman from Local 72 in Kenosha, Wis., who said he was satisfied with the deal. “Our bargaining committee did the best they could.”

Chrysler workers would see gains of $10,235 over the life of the agreement, according to the booklet. Chrysler also would contribute $10.3 billion toward retiree healthcare, including $8.8 billion to create a union-run trust for retiree healthcare and $1.5 billion in retiree care costs until the trust takes effect. Chrysler has an $18-billion retiree healthcare obligation.

Health benefits also would be protected for active workers, and retiree healthcare would be funded starting in 2010 by the trust, called a Voluntary Employees Beneficiary Assn. The organization must gain court approval.

Chrysler also would fund the trust with a financial instrument called a warrant with a potential equity value of $605 million. And retirees would get a raise of $66.70 in their pension checks per month, of which $51.67 would go toward the trust.

“Chrysler had an agenda that was nothing but cutbacks, but our membership turned the company around,” UAW Vice President General Holiefield said in the booklet.

The union also said it reversed a company plan to sell its Mopar parts division and a parts-trucking operation as part of the negotiations.

The voice vote approving the tentative agreement came after a four-hour meeting at which national bargaining committee members explained the deal to hundreds of local leaders.

Several union leaders said there was some dissent over the contract’s job security provisions, which were less extensive than those in an agreement reached earlier between the UAW and General Motors.

Some of the leaders said dissenters didn’t like the lower-tier wages and a lack of future products for so many plants.

Chrysler’s national UAW contract also covers about 78,000 retirees and spouses. A majority of active workers must vote for the contract for it to take effect.

Chrysler and the UAW got the tentative deal Wednesday after a six-hour strike.