Chrysler LLC said it has been given until tomorrow to reach an agreement on a new contract with the United Auto Workers union or face a possible strike.
The auto maker’s previous contract had been extended while the UAW negotiated with General Motors Corp. The union, which is using the GM settlement as a model in the Chrysler talks, gave notice Oct. 6 that it’s ending the extensions. The new deadline is 11 a. m. Oct. 10, company spokeswoman Michele Tinson said yesterday. She declined further comment.
Chrysler needs health care concessions for active workers that GM and Ford Motor Co. won in 2005, said John Casesa of Casesa Strategic Advisors LLC in New York. The talks also focus on a highlight of the GM contract, a company-financed health-care trust known as a Voluntary Employees’ Beneficiary Association (VEBA). The union, taking another page from the GM accord, wants guarantees of future work at U. S. plants, Mr. Casesa said. JOHN LIPPERT AND JEFF BENNETT, globeandmail.com
The UAW represents 49,000 hourly workers at Chrysler, which has about 6,000 workers at three transmission assembly plants and a casting plant in Indiana. All transmissions for Chrysler, Dodge and Jeep vehicles are made in Kokomo.
The deadline may be a tactic the union is using to squeeze more concessions from the company. But it also may be that Chrysler isn’t just going to agree to the same terms GM did just because that’s how it’s traditionally done.
Chrysler’s needs are different, analysts said. “We think that they may be holding out for something more than GM got, ” said Aaron Bragman, an industry analyst with Global Insight. IndyStar.com
Before last month’s walkout at General Motors, the United Automobile Workers had not staged a major strike during contract talks for more than two decades.
But Detroit is facing the possibility of two strikes within just three weeks if talks between the union and Chrysler fail to produce a deal by 11 a. m. Eastern time on Wednesday.
Chrysler confirmed Monday that the union had set the strike deadline after a weekend of intense talks that resulted in progress in some areas, but left many issues unresolved. Talks continued into the evening. NICK BUNKLEY, NewYorkTimes
On a positive note for Chrysler, five factories are already on scheduled down time this week; so, much like last month’s strike at General Motors, a relatively short work stoppage would probably amount to more of a statement than an actual blow to the business.
GM failed to come to an agreement by the UAW’s strike deadline, resulting in a two-day strike before accepting a deal that allows the world’s biggest automaker to shed $50 billion in retiree health-care obligations.
Domestic car companies point to their retiree health-care burden as a primary reason they pay $25 to $30 an hour more per factory worker than the Japanese manufacturers.
Chrysler, with a total workforce of almost 78,000, employs about 45,000 union workers and has more than 110,000 retirees and spouses receiving retiree benefits. Shawn Langlois, MarketWatch
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