Chrysler reaches union pact just hours after strike begins
By Tom Krisher and Dee-Ann Durbin
Associated Press
DETROIT — The United Auto Workers union reached a tentative four-year contract with Chrysler yesterday, hours after going on strike and the same day that General Motors workers ratified a separate four-year pact.
Next up: Ford.
A person with knowledge of the Chrysler LLC agreement said it includes 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 healthcare costs, and a lower wage scale for some newly hired workers.
The source, who requested anonymity because the contract has not been ratified, said the new vehicle guarantees are not as extensive as those given by General Motors Corp.
The guarantees, which translate into job security for union workers, are in many cases only for the life of current products, the source said. GM gave guarantees at many factories that include the next generation of cars, trucks and parts.
The new lower wage scale, the source said, covers new hires who would replace Chrysler Mopar parts transportation workers. Buyout and early retirement offers would be made to current workers in an effort to get them to leave, the source said.
The lower wage scale is similar to the one negotiated by GM, the source said.
UAW President Ron Gettelfinger said the strike against Chrysler, which is 80.1 percent owned by private equity firm Cerberus Capital Management LP, will end immediately and that workers were to report for their next available shift.
UAW members at 19 of 24 U.S. Chrysler factories and several other facilities had left their jobs for the picket lines at 11 a.m. yesterday and stayed out for about six hours.
"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.
Gettelfinger wouldn't release any contract details, but Chrysler said the tentative agreement includes the retiree healthcare trust. The newly private company didn't say how much money it will contribute to the trust.
"The national agreement is consistent with the economic pattern and balances the needs of our employees and company by providing a framework to improve our long-term manufacturing competitiveness," Chrysler chairman Tom LaSorda said in a statement.
Chrysler's national UAW contract covers about 45,000 workers and 78,000 retirees and spouses.