Posted on: Monday, September 15, 2003
Chrysler, UAW agree on contract
By John Porretto
Associated Press
DETROIT — The United Auto Workers union said early today it reached a tentative, four-year contract agreement with automaker DaimlerChrysler AG and will continue to negotiate with General Motors Corp. and Ford Motor Co.
Details of the tentative agreement weren't immediately released.
The UAW had hoped to reach simultaneous pacts with the Big Three automakers, but General Motors Corp. and Ford Motor Co. haven't reached an agreement. Current contracts expired at midnight.
The union typically chooses one carmaker as the lead negotiator and uses that pact as a model for the other two. The union bargained with all three automakers at once this year and did not publicly name a lead company, although one was chosen soon after Labor Day.
Representatives of the UAW and the Big Three, along with suppliers Delphi Corp. and Visteon Corp., have met since mid-July. They negotiated on issues such as wages, jobs, healthcare and pensions that affect 300,000 workers and nearly a half-million retirees and their spouses.
With the U.S. market share for GM, Ford and DaimlerChrysler at an all-time low, and foreign automakers continue to expand domestic lineups and capacity, most observers said the probability of a strike was low.
Some analysts and labor experts have said the new pacts likely will reflect the difficult predicaments of the automakers, whose combined U.S. market share fell to an all-time monthly low of 57.9 percent in August.
As well, Ford is trying to rebound financially from a loss of $6.4 billion in 2001 and 2002. Chrysler lost $1.1 billion in the second quarter of this year and last month was outsold in the domestic market for the first time by Toyota Motor Corp.
Ford and GM employees will continue to report to work as usual while the negotiations continue, UAW President Ron Gettelfinger said.
The threat of losing more business to Toyota and others was evident as talks began this summer. At the time, Troy Clarke, a top negotiator for GM, said he didn't consider negotiations with the UAW "us versus them" because both sides needed to protect themselves from the growing presence of foreign automakers.
Since 1996, foreign companies have increased their domestic capacity from 1.9 million vehicles to more than 4 million per year, and the trend continues.
Analysts said both sides understood the others' situations and that compromise in areas such as wage and pension increases was likely.
Gettelfinger had insisted the union would not retreat on healthcare benefits, so some analysts said negotiators were likely to reach agreements that would give automakers more flexibility in plant closings in exchange for continued low-cost medical coverage.
One Wall Street analyst has said the Big Three likely needs to close between seven and 10 plants in North America to move supply and demand into better balance.
The current contracts were negotiated in 1999 during the term of Gettelfinger's predecessor, Stephen Yokich, who died last year shortly after his retirement. Those pacts included 3 percent annual pay increases, a ban on plant closings and nearly cost-free healthcare.
