Strike of 31,000 Chrysler Union Workers Ends After Six Hours With a New Agreement; GM Workers Ratify Their Union Deal

By Mike Caggeso
Staff Writer

It took a six-hour strike to get it done - with more than 31,000 members of the United Auto Workers walking out on their jobs at the newly private automaker, Chrysler LLC, at 11 a.m. yesterday (Wednesday) - but the company and the union reached agreement on a tentative four-year deal.

News of the Chrysler/UAW pact came shortly after the UAW announced that General Motors Corp. (GM) workers had ratified their own four-year deal with the No. 1 U.S. automaker.

The union will now move on to struggling Ford Motor Co. (F). But Ford, which hemorrhaged $12.6 billion last year, may end up being the toughest bargainer of the three because of its weakened financial position, experts told The Associated Press. Industry analysts believe that Ford likely will seek a different deal than Chrysler and GM, very likely with much deeper concessions. Marcey Evans, a spokesperson for Ford, said the company hadn't heard from the union, as of last night. The company wasn't able to say when talks might resume.

The short Chrysler strike yesterday - which follows insider leaks of more job cuts, both union and salary positions - affected 41 manufacturing plants and facilities. The only facilities not hurt by the strike were five assembly plants Chrysler had already closed due to excess inventory.

And while it's the first UAW strike of Chrysler in 10 years, it was the UAW's second strike in three weeks. Its walkout of GM in late September lasted two days. Negotiators there walked out with an agreement that gave UAW job-security pledges, while allowing GM to shed more than $50 billion in health-care obligations.

There were worries that negotiations with Chrysler could prove longer and more tumultuous, Erich Merkle, director of forecasting for automotive consulting firm IRN Inc., told CNN Money. After almost 10 years of ownership by Germany-based DaimlerChrysler (now Daimler AG (DAI)), 80.1% of Chrysler Group was sold to American equity firm Cerberus Capital Management L.P., in May 2007.

"The UAW is somewhat of an unknown entity to Cerberus and Cerberus is an unknown entity to the union. I don't know if the parties understand each other that well," Merkle said . "It's not like GM, which is an old hand in dealing with the union. I wouldn't assume it is only going to be two days."

A person with inside knowledge of the Chrysler agreement told The AP the deal included some guarantees that vehicles will be produced at U.S. factories, a company-funded union-run trust that will pay much of Chrysler's $18 billion in long-term retiree health care costs, and a lower wage scale for some newly hired workers. The person, who requested anonymity because the contract has not been ratified by union members, said Chrysler's vehicle guarantees, which translate into job security for veteran union workers, are not as extensive as those given by GM. In fact, many of the Chrysler guarantees last only through the lifespan of current products. GM, by comparison, made guarantees at many factories that included the next generation of cars, trucks and even parts.

According to published reports, the proposed new lower wage scale at Chrysler is said to cover new hires who would serve as the replacements for parts-transportation workers. Buyout and early retirement offers would be made to current workers in an effort to reduce the ranks, the person said. The lower wage scale is similar to the one negotiated by GM, sources say.

UAW President Ron Gettelfinger wouldn't outline the details of the agreement with Chrysler.

"This agreement was made possible because UAW workers made it clear to Chrysler that we needed an agreement that rewards the contributions they have made to the success of this company," Gettelfinger said in a statement.

Chrysler said the tentative agreement covers about 45,000 workers and 78,000 retirees and spouses, and noted that it does include the retiree health care trust. What's not clear is how much money the newly private company will contribute to the trust.

The UAW said its "historic" contract with GM also includes a retiree health care trust. It was reportedly approved by 66% of production workers and 64% of skilled trades workers. The Sept. 26 agreement was reached following a two-day national strike.

The UAW's strike at 19 of Chrysler's 24 U.S. manufacturing plants began at 11 a.m. yesterday, but since the agreement was reached six hours later, the UAW's Gettelfinger said the walkout would end immediately.

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