Union Balks, Management Bristles

Posted by: David Welch on October 22, 2007

After General Motors Corp. got its union workers to easily accept a concession-laden contract earlier this month, it looked like similar deals and Ford and Chrysler would be a cinch. Guess again. A handful of union locals have voted down the tentative four-year labor agreement between Chrysler and the union, which would accept a union-led trust fund that will manage retiree healthcare benefits, give new hires a $14 an hour wage for some jobs and weaker paid layoff protection. For GM, a similar contract is expected to cut 75% of the nearly $30 per-hour wage gap between GM and Toyota. It should be a big boon for Chrysler, too.

But only if the UAW can get its members to ratify what top leaders signed. UAW Local 51, which represents workers at two engine plants in Detroit, held a vote today. One local officer, who didn’t want to be named, said it would be pretty close. Judging from the conversations in the plant, the local official said, some workers just didn’t like the much lower wages for some new hires. Getting equal pay for everyone on the plant floor has been a principal tenet of the UAW for decades. Plus, Chrysler didn’t give union workers any kind of guarantees that some plants would get new cars to build. GM was willing to do that. The bottom line for Chrysler is that if the deal isn’t ratified, union and management will have to reconvene at the table and UAW President Ronald Gettelfinger will have to return with some red meat for his members. It could mean more job security guarantees from Chrysler in exchange for ratifying the deal.

Across town, Ford executives must be biting their nails right down to the quick. The company just turned a small profit last quarter. Even though its business is on precarious footing, the rank-and-file union workers may take their cue from Chrysler workers and question all of the give backs. After all, when the UAW gave Ford some concessions on retiree healthcare last year, the deal passed with just 51% of the membership agreeing to it. Ford and Chrysler may get the transformation deal GM has inked, but not without some kind of iron-clad deal that Americans will be making cars here for years to come.

Reader Comments

Phantom

October 23, 2007 8:52 PM

Hats off to Larry!The think smarter work
force has arrived! Rommel,I read your book!
Given new technology,the computer these
days has assisted in comparing GMs Agree
ment to Chryslers.
No longer taking the highlights and the
up-front bonus money.Now reading the fine print and making intelligent decisions without Union intimidation.

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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