UAW President Ron Gettelfinger - Articles - Zimbio

Chrysler Workers Strike as Talks Fail to Yield Accord

Tue, 10 Oct 2007 19:03:00 GMT

posted by chero

Oct. 10 -- Chrysler LLC's U.S. factory workers went on strike today after the United Auto Workers union failed to reach a new contract agreement with the third-largest U.S.- based automaker.

Workers at all but five of Chrysler's UAW-represented plants began walking off their jobs at the 11 a.m. New York time strike deadline, according to a UAW memo. Bargainers negotiated after the strike began and then took a break, a person familiar with the situation said.

The UAW struck General Motors Corp. for two days last month. That walkout ended with an historic agreement that would allow GM to shed $50 billion of future health-care obligations in exchange for job-security pledges. Chrysler, now controlled by Cerberus Capital Management LP, is wrangling with the union over the same issues.

Chrysler may be less able to make job guarantees because ``their outlook for products and what plants they may be using may not be as strong as General Motors','' said Catherine Madden, who studies automakers' vehicle plans for Global Insight Inc. in Lexington, Massachusetts.

The strike is the union's first at Auburn Hills, Michigan- based Chrysler in a decade. The union represents more than 45,000 hourly workers at the company.

UAW President Ron Gettelfinger sought a Chrysler accord that closely follows the GM pattern. That agreement allowed the automaker to shift its retiree health-care obligations to a UAW- run fund and pay new workers lower wages.

``If the UAW makes an issue of job security, that will be met with some resistance by Cerberus,'' said Patrick O'Keefe, principal of consulting firm O'Keefe & Associates in Bloomfield Hills, Michigan, whose clients include auto-parts makers.

`Major Test'

The Chrysler talks marked the union's first negotiations with an automaker owned by a private-equity firm. Cerberus acquired 80.1 percent of the company from Daimler AG in August.

``This is a major test for whether private equity thinks U.S.-located manufacturing is even feasible,'' said Sean McAlinden, an analyst at the Center for Automotive Research in Ann Arbor, Michigan.

The UAW turned its attention to Chrysler on Oct. 5. The union's previous contracts with Chrysler and Ford Motor Co. expired Sept. 14, and had been extended while the union worked out the GM contract. Ford's contract remains extended.

The three companies, battered by Japanese rivals Toyota Motor Corp. and Honda Motor Co., lost a combined $15 billion last year, including $680 million at Chrysler.

Michele Tinson, a Chrysler spokeswoman, declined to comment. Roger Kerson, a UAW spokesman, didn't return a telephone message seeking comment.

Already Closed

Of the five plants not affected by the walkout, four had been shut temporarily because of declining sales.

Factories not affected by the strike include a Belvidere, Illinois, plant that makes the Jeep Patriot and Compass sport- utility vehicles; a Newark, Delaware, factory that makes the Dodge Durango and Chrysler Aspen SUVs; and a Warren, Michigan, plant that makes the Dodge Ram and Dakota pickups.

Also unaffected are two plants in Detroit that make the Viper sports car and Jeep Grand Cherokee.

Under the union's contract with the company, members who are laid off receive 95 percent of their take-home pay. Workers who strike aren't paid and draw from the union's strike fund.

``We didn't want to go on strike,'' said Richard Buletta, 54, a tester at Chrysler's assembly plant in Sterling Heights, Michigan. ``It will start to become a worry if it stretches out awhile.''

GM's Contract

GM will put $29.9 billion into a retiree-health trust fund that takes effect in January 2010, according a union summary. GM will continue to pay retiree health-care costs at the current rate, estimated to total $5.4 billion, until the fund takes over, the UAW said.

GM's tentative contract includes no basic wage increase. Workers will get a $3,000 bonus in the first year and lump-sum bonuses equal to 3 percent of wages in the second year, 4 percent in the third and 3 percent in the fourth.

GM workers conclude voting for the agreement today. U.S. workers from at least 28 locals had approved the contract, according to a Bloomberg tally, while at least five had voted against.

Retiree Costs

Retiree medical liabilities at GM, Ford and Chrysler totaled $114 billion at the end of 2006.

The U.S.-based companies said the retiree-health costs are part of the reason they must pay $25 to $30 more an hour for American factory workers than Toyota and Honda pay at their U.S. plants.

Chrysler also wants the UAW to match health-care concessions the union granted to GM and Ford in 2005.

Under those agreements, active workers directed a portion of future wage increases to a health-care fund. Retirees paid as much as $752 a year per family for medical coverage; they had no out-of-pocket expenses before.

The UAW declined to grant the givebacks to Chrysler after only 51 percent of Ford workers ratified the health-care concessions.

Chrysler's last UAW strike came in 1997, when a 27-day walkout at a Detroit axle plant shut down one-third of its North American factories and cost $300 million in profit.

Since then, Chrysler has been sold to DaimlerChrysler AG and then shed to Cerberus.

``The mood inside is glum,'' said Daniel DeLalla, 52, an assembler at the Sterling Heights plant. ``I'm worried about this new company. I'm afraid they are going to strip us apart and shut us down.''

New Labor Deal Ratified by GM’s UAW Workers

Wed, 11 Oct 2007 04:01:11 GMT

posted by Editor
And GM got an even better deal than we thought...

By Brendan Moore

10.11.2007

Chrysler and UAW used up all the headlines yesterday, but something else important happened – the UAW workers employed by General Motors fully ratified their new tentative labor agreement. The UAW said 66% of its GM production workers voted in favor of the deal and 64% of the skilled trades voted in favor. The contract covers about 74,000 hourly employees at GM.

As we mentioned last month when the tentative agreement was hammered out, the agreement will considerably change the dynamic between GM and its salaried workers. But we didn’t realize just how far-reaching the changes will be until we saw some detail yesterday.

Something that didn’t come out in the details released previously regarding the agreement is the language around pensions and employee healthcare for new hires. The new agreement allows General Motors to require almost every new hire that comes in the door to participate in a defined-contribution plan (i.e., 401k plan) in order to fund their own pension and healthcare costs. The current employees get company-funded healthcare and pensions that cost GM a whopping amount of money every year. What does that mean, exactly? Well, what it means is that pretty soon GM will have generations of new employees that will be paid just about the same as the workers at Toyota or Honda in the United States. In other words, parity in labor costs.

This is very, very important to General Motors. And if it’s in the Chrysler-UAW agreement, it will be just as important to them. Ditto for Ford.

It is a cataclysmic re-jiggering of the domestic auto companies’ future labor costs and it fundamentally changes their competitive abilities going forward.

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UAW and Chrysler Reach Agreement

Tue, 10 Oct 2007 21:57:00 GMT

posted by Editor
By Brendan Moore

10.10.2007

The strikes are getting shorter, anyway...

5:31 PM: Chrysler and the UAW have reached a tentative labor agreement after what was approximately a 6-hour strike by UAW workers at Chrysler plants in the U.S.

Details of the new 4-year labor agreement were not immediately available, but both UAW and Chrysler sources confirmed that the deal had been agreed to late this afternoon.

Ron Gettlefinger, UAW president, called the second strike in less than 30 days against one of the Big 3 after an 11 AM deadline passed this morning with no agreement. Gettlefinger made a point of speaking to reporters immediately, saying, "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."

Mr. Holiefield, director of the UAW’s Chrysler department, stated, "Once again, teamwork in the leadership and solidarity in the ranks has produced an agreement that protects jobs for our communities and also protects wages, pensions, and health care for our active and retired members."

Gettlefinger typically sets a strike deadline as the UAW and an auto manufacturer get close to terms in order to put more pressure on both sides to make a deal, and he followed his same M.O. in this instance, just as he did with the GM negotiations.

It will be interesting to see just how far the Chrysler/UAW agreement deviates from the GM/UAW agreement signed last month. Cerberus was reluctant to fund the pension fund at the same rate as GM did in their UAW agreement, and there were also some prickly issues around outsourcing parts and transportation jobs that bedeviled these labor talks.

We will give you more information as it becomes available.

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Ford and UAW Have the Last Dance

Sun, 15 Oct 2007 08:31:57 GMT

posted by Editor
No strike expected this time around

By Brendan Moore

10.15.2007

Ford and the UAW are next, and last, for the Big 3 labor hoedown, and there may be some different moves coming up in this last pas de deux.

Yes, pattern bargaining is the way the UAW likes to go, but there may be some problems with sticking to the same script that GM and Chrysler used in their labor agreement.

One, Ford’s financial position is more tenuous than either GM’s or Chrysler’s (they lost $12.6 billion USD last year and are still losing market share every month this year) and therefore they have less to give. Second, their workforce is a little younger then the other two of the Big 3, so Ford has less to gain. Third, at this point, Ford does not have all its North American product plans nailed down even 36 months out, so with that in mind, giving the UAW production guarantees for the desired 48-month contract term is going to be problematic.

But, all that notwithstanding, I expect that Ford and the UAW will reach agreement without the UAW going out on strike as they did with GM and Chrysler. Why?

Well, first and foremost, the UAW has always historically had the best relations by far with Ford, out of all the domestic auto companies. Second, the UAW is acutely aware of Ford’s financial bleeding. The UAW union official in charge of Ford, Bob King, is known as a straight-ahead, astute, well-informed practical negotiator and is not going to waste time with any wild-eyed demands or ridiculous posturing just for the sake of appearances. Third, the union has already signaled that they are willing to be flexible around the margins of the contract in order to accommodate Ford’s special business situation. Fourth, Ford has previously implemented in years past what GM and Chrysler fought hard for in their current contracts; that is, “competitive operating agreements” that have allowed them to outsource a lot of non-essential positions. Fifth, Alan Mulally, CEO of Ford, has a warm personal relationship with Ron Gettlefinger, the UAW president, and has stated that he considers Gettlefinger his “business partner” in the Herculean effort to bring Ford back from the edge of the abyss.

I am not unique in this perspective; some people in the markets are already anticipating a quick agreement between the UAW and Ford as evidenced the fall in rates for credit-default swaps regarding the debt of auto-parts makers. Credit-default swaps protect investors that buy the debt of the auto-parts companies, and if its considered more likely that the auto companies (Ford, Chrysler, GM, et al) will pay for the parts they order (because their financial situation has improved), then the rates for that debt insurance go down. As an example, the Wall Street Journal has reported that Visteon, Ford’s largest supplier, experienced a considerable drop in their costs of insuring against defaults – in a single 24-hour period, the cost fell to $695,000 for $10 million in bonds, down from $754,000 just a day earlier. That is a huge drop in one day, and obviously, most market analysts feel that UAW and Ford will get a deal done with a minimum of fuss.

I have to assume that’s why Ford was scheduled for last on the UAW’s dance card. They knew they would have to give more concessions to Ford in order for Ford to have a chance of staying in business, and the last thing the UAW wanted was for the more-generous Ford agreement to establish the template for the GM and Chrysler contracts.

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Chrysler/UAW: What's Wrong With The Contract

Sun, 22 Oct 2007 14:04:56 GMT

posted by philbee
Posted By:Phil LeBeauI watched the latest vote results from rank and file United Auto Workers at Chrysler and thought to myself, "what do these people want?" Through the weekend an estimated 11,000 UAW have rejected the tentative contract the union agreed to with Chrysler. Some 6,000 have voted in favor of it. Read More