Reuters
UAW: Union Workers Ratify Chrysler Pact
Friday September 26, 4:42 pm ET
By Tom Brown
DETROIT (Reuters) - Rank-and-file members of the United Auto Workers have approved a new four-year labor contract with the struggling Chrysler unit of DaimlerChrysler (NYSE:DCX - News; XETRA:DCXGn.DE - News), the union said on Friday.
It did not give voting results on the contract, which calls for four plant closings and thousands of expected layoffs at Chrysler, and union spokesman Roger Kerson declined comment.
In the past the UAW, whose membership has declined dramatically over the past two decades, has disclosed by what margin its contracts with Detroit's Big Three automakers were approved.
The Chrysler deals cover more than 60,000 active UAW workers, as well as more than 57,000 retirees and 17,500 surviving spouses of retired workers.
The tentative UAW contract with Chrysler was announced on Sept. 15 and pacts between the union and Ford Motor Co. (NYSE:F - News) and General Motors Corp. (NYSE:GM - News) followed days later.
The four-year deals also affect GM's former auto parts unit Delphi Corp. (NYSE:DPH - News) and parts supplier Visteon Corp. (NYSE:VC - News), and all are due to be ratified by the end of next week.
The agreement capped about two months of tough negotiations and calls for the closure or sale of up to 10 U.S. plants, along with an estimated 50,000 layoffs, as the Big Three struggle to compete with foreign automakers while battling declining market share, falling prices and billions of dollars in health care and pension liabilities.
Emblematic of those struggles is Chrysler, which reported an operating loss of $1.1 billion in the second quarter and has seen its U.S. market share plunge in recent months. Ford, meanwhile, has lost nearly $6.5 billion over the past two years.
Under the new contracts, UAW workers will largely retain the generous health care benefits they had under their previous agreements, which were signed when the U.S. auto industry was riding high in 1999. But co-payments for brand-name prescription drugs for active employees will double, and annual base wage hikes were limited to 5 percent over four years, compared with 12 percent in the previous contracts.
Despite those and other concessions, including the partial lifting of a ban on plant closings introduced in previous contracts, a growing chorus of industry analysts have said the new labor agreements will fail to close the competitive gap between Detroit and foreign automakers. |
