The UAW said today it has reached a tentative agreement with Chrysler, giving the union a deal with the third and final automaker in this year’s national contract negotiations.
The UAW said the agreement would add 2,100 new jobs and $4.5 billion in new investments at Chrysler's U.S. plants.
“Less than three years ago, Chrysler was teetering on the edge of bankruptcy as our nation was thrown into the worst economic crisis since the Great Depression,” UAW President Bob King said in a statement. “This tentative agreement builds on the momentum of job creation and our efforts to rebuild America by adding 2,100 new jobs by the end of the agreement in 2015 to communities left in turmoil in the wake of the country’s economic collapse.”
Chrysler, in a statement, confirmed that it has reached a tentative deal with the UAW.
Details of the agreement include:
• $3,500 signing bonus, with half to be paid up-front and half to be paid at a later date when Chrysler reaches certain financial targets.
• Inflation protection bonus of $500 each year over the four-year contract for a total of $2,000 over the life of the contract. This is less than the $3,000 GM workers received for a similar bonus in their contract and the $6,000 Ford workers could gain from their contract.
• $500 annual quality bonus.
• Entry-level, second-tier workers, now making about $14.65 an hour, will receive raises to $19.28 an hour by the end of the contract. First-tier workers, as at GM and Ford, receive no raise.
• A revised profit-sharing formula similar to an agreement ratified by GM workers.
• All new jobs will be entry-level jobs.
• No cap on entry-level hires until 2015.
Chrysler agreed to invest at the following Chrysler plants if the company’s 26,000 UAW members ratify the deal by a majority vote in coming days:
• Belvidere, Ill., for a new compact vehicle
• Sterling Heights, for another new compact vehicle
• Kokomo, Ind., for a new front wheel drive 9-speed transmission and new rear wheel drive 8-speed transmission
• Toledo, for new steering columns and torque converters
• Trenton, to reuse part of the recently idled Trenton North Engine Plant to produce 3.8-iter, V-6 engines.
Both King and UAW Vice President General Holiefield emphasized the need for new jobs from these investments.
"We did not enter any set of negotiations to break any one of these companies,” Holiefield said. “We recognize that the corporation is in its infant stages of a comeback.”
Chrysler has hired about 2,800 lower-cost entry-level workers, or about 12% of its workforce. Chrysler and Fiat CEO Sergio Marchionne achieved his objective of eliminating a 25% cap on the percentage of Chrysler’s workers who could be paid the lower second-tier wage.
Taxpayer assistance remembered
From the outset, both Chrysler executives and UAW officials said they would be negotiating knowing that Chrysler might not exist without the federal loans received in 2009.
Chrysler declared bankruptcy on April 30, 2009, and emerged with the help of the federal government and its new owner, Fiat.
Today, Fiat owns 53.5% of Chrysler and is expected to increase that ownership to 58.5% by year's end.
“This agreement is the latest in a remarkable turnaround for Chrysler,” UAW Vice President General Holiefield said in a statement today. “The company declared bankruptcy just a few years ago and with great sacrifice by UAW Chrysler workers and with federal loans and support from the Obama administration, Chrysler has paid back the loans in full.”
As of July, the U.S. government no longer owns any Chrysler shares and Chrysler no longer owes the government for the $12.5 billion in loan commitments by the Bush and Obama administrations.
Still, the UAW and Chrysler needed to demonstrate they could avoid falling into bad habits and a protracted labor struggle could have damaged the image of both.
“It wasn’t too long ago …that we emerged from a very painful restructuring of the industry,” Al Iacobelli, Chrysler’s vice president of employee relations, said in July when negotiations began. “We have a responsibility to the American public as well as to the Canadian governments.”
Arbitration trap dodged
By reaching an agreement, the UAW and Chrysler will avoid a potentially long binding arbitration process that could have been costly for both sides.
Chrysler workers gave up the right to strike over wages under the terms of its 2009 government restructuring.
If Chrysler had submitted any issue to arbitration, the UAW could have submitted an issue of its choosing to the same arbitrator.
But arbitration would have taken both the company and the union into uncharted waters for a private corporation and would have taken the final decision out of their hands.
In the public sector, where workers cannot strike, arbitration often takes months — and sometimes even a year to resolve, according to labor experts.
Arbitration also would have prolonged uncertainty for the company and its workers. By contrast, GM and Ford would have moved on with labor peace and investments that preserve or add jobs over the next four years.
Contact BRENT SNAVELY: 313-222-6512 or bsnavely@freepress.com.
From the Detroit Free Press
The UAW said the agreement would add 2,100 new jobs and $4.5 billion in new investments at Chrysler's U.S. plants.
“Less than three years ago, Chrysler was teetering on the edge of bankruptcy as our nation was thrown into the worst economic crisis since the Great Depression,” UAW President Bob King said in a statement. “This tentative agreement builds on the momentum of job creation and our efforts to rebuild America by adding 2,100 new jobs by the end of the agreement in 2015 to communities left in turmoil in the wake of the country’s economic collapse.”
Chrysler, in a statement, confirmed that it has reached a tentative deal with the UAW.
Details of the agreement include:
• $3,500 signing bonus, with half to be paid up-front and half to be paid at a later date when Chrysler reaches certain financial targets.
• Inflation protection bonus of $500 each year over the four-year contract for a total of $2,000 over the life of the contract. This is less than the $3,000 GM workers received for a similar bonus in their contract and the $6,000 Ford workers could gain from their contract.
• $500 annual quality bonus.
• Entry-level, second-tier workers, now making about $14.65 an hour, will receive raises to $19.28 an hour by the end of the contract. First-tier workers, as at GM and Ford, receive no raise.
• A revised profit-sharing formula similar to an agreement ratified by GM workers.
• All new jobs will be entry-level jobs.
• No cap on entry-level hires until 2015.
Chrysler agreed to invest at the following Chrysler plants if the company’s 26,000 UAW members ratify the deal by a majority vote in coming days:
• Belvidere, Ill., for a new compact vehicle
• Sterling Heights, for another new compact vehicle
• Kokomo, Ind., for a new front wheel drive 9-speed transmission and new rear wheel drive 8-speed transmission
• Toledo, for new steering columns and torque converters
• Trenton, to reuse part of the recently idled Trenton North Engine Plant to produce 3.8-iter, V-6 engines.
Both King and UAW Vice President General Holiefield emphasized the need for new jobs from these investments.
"We did not enter any set of negotiations to break any one of these companies,” Holiefield said. “We recognize that the corporation is in its infant stages of a comeback.”
Chrysler has hired about 2,800 lower-cost entry-level workers, or about 12% of its workforce. Chrysler and Fiat CEO Sergio Marchionne achieved his objective of eliminating a 25% cap on the percentage of Chrysler’s workers who could be paid the lower second-tier wage.
Taxpayer assistance remembered
From the outset, both Chrysler executives and UAW officials said they would be negotiating knowing that Chrysler might not exist without the federal loans received in 2009.
Chrysler declared bankruptcy on April 30, 2009, and emerged with the help of the federal government and its new owner, Fiat.
Today, Fiat owns 53.5% of Chrysler and is expected to increase that ownership to 58.5% by year's end.
“This agreement is the latest in a remarkable turnaround for Chrysler,” UAW Vice President General Holiefield said in a statement today. “The company declared bankruptcy just a few years ago and with great sacrifice by UAW Chrysler workers and with federal loans and support from the Obama administration, Chrysler has paid back the loans in full.”
As of July, the U.S. government no longer owns any Chrysler shares and Chrysler no longer owes the government for the $12.5 billion in loan commitments by the Bush and Obama administrations.
Still, the UAW and Chrysler needed to demonstrate they could avoid falling into bad habits and a protracted labor struggle could have damaged the image of both.
“It wasn’t too long ago …that we emerged from a very painful restructuring of the industry,” Al Iacobelli, Chrysler’s vice president of employee relations, said in July when negotiations began. “We have a responsibility to the American public as well as to the Canadian governments.”
Arbitration trap dodged
By reaching an agreement, the UAW and Chrysler will avoid a potentially long binding arbitration process that could have been costly for both sides.
Chrysler workers gave up the right to strike over wages under the terms of its 2009 government restructuring.
If Chrysler had submitted any issue to arbitration, the UAW could have submitted an issue of its choosing to the same arbitrator.
But arbitration would have taken both the company and the union into uncharted waters for a private corporation and would have taken the final decision out of their hands.
In the public sector, where workers cannot strike, arbitration often takes months — and sometimes even a year to resolve, according to labor experts.
Arbitration also would have prolonged uncertainty for the company and its workers. By contrast, GM and Ford would have moved on with labor peace and investments that preserve or add jobs over the next four years.
Contact BRENT SNAVELY: 313-222-6512 or bsnavely@freepress.com.
From the Detroit Free Press
