The United Auto Workers Union’s tentative contract with Chrysler LLC presented to union members Tuesday fundamentally changes labor relations by curbing the UAW’s right to strike for the next several years.
The contract was being presented to the more than 28,000 UAW members ahead of the ratification vote today.
“It’s very difficult,” said one union leader, who asked not to be identified.
“I really don’t think we had much choice but to go along,” Harley Shaiken, a labor expert from the University of California-Berkeley, said the “no-strike” provision represents a major change in Detroit’s often contentious labor relations. “That’s a fundamental change,” Shaiken said. “But it’s being done in the context that it will take anywhere from three to five years for this company to recover,” he said.
For years, the union had used the strike threat in economic disputes, particularly at General Motors and Chrysler. In fact, the union staged brief strikes against Chrysler and GM during contract talks in 2007, and a major 80-day strike against American Axle. However, the terms of the bridge loan agreements, effectively ban strikes. A strike is considered a default under the terms of the loan, which means even a local strike, a favorite union bargaining weapon in recent years, is probably off the table now, said one key union official.
The tentative pact, which UAW members are expected to ratify, would give 55% of the shares in a restructured Chrysler LLC to a retiree health care trust. The union will get a seat on the board, if union members vote to approve contract concessions.
The proposed contract, however, will restrict the right of union members to strike in contract negotiations in the future. Instead, the contract calls for binding arbitration on economic provisions for any contract negotiated in 2011. The same provision would apply again in 2015, if Chrysler still owed money to the U.S. government, noted one UAW official, and the union wages have to be in line with those paid at other auto plants in the U.S. The arbitrator must base labor costs on pay at Chrysler’s U.S. competitors, including foreign-owned manufacturers, according to information distributed by the union.
UAW President Ron Gettelfinger, however, said the union had succeeded in protecting current union members.
“We fought to maintain our wages, our health care and our jobs,” he said in a letter to union members. “In the face of adversity, we secured new product guarantees, and we negotiated new opportunities for UAW involvement in future business decisions.”
The proposed contract eliminates bonuses, reduces supplemental unemployment benefits and cuts retiree health-care benefits by trimming some coverage and expanding co-payments, according to union officials.
The contract, which is largely patterned after the one the union negotiated at Ford Motor Company, also includes a sharp reduction in the number of skilled job classifications and the implementation of team concept for all production workers.
The tentative UAW revised agreement with Chrysler, Fiat and the U.S. Treasury Department also eliminated cost-of-living pay raises.
Meanwhile, Chrysler was closing in on a deal with creditors, as TDB has reported earlier today.
“We continue to remain focused on completing these and all other transactions needed to qualify for ongoing financial support from both the U.S. and Canadian governments. As always, we are committed to preserving Chrysler and the jobs associated with its future success,” Chrysler Chairman Robert Nardelli said in an e-mail to employees Tuesday.
Nardelli said a new agreement with Daimler AG, which will put $600 million into Chrysler’s pension fund over the next three years, will also make it easier to forge an alliance with the Italian carmaker Fiat Spa. “This agreement represents another step on our road to meeting U.S. government requirements by the Thursday deadline,” he said.