Intensified Chrysler
by EVANDER KLUM
The Wednesday strike deadline is just around the corner and the negotiators from Chrysler and the United Auto Workers are hurrying things up to form an agreement for the 49,000 UAW members working for the automaker to avoid the threatened strike. UAW had announced that if until Wednesday, at 11 am, Chrysler failed to address the union��s demands concerning wages and benefits, there will be another national strike following that of in September against General Motors.
Starting Monday morning, the negotiators started the bargaining that ran through Tuesday at four in the morning in Chrysler��s Auburn Hill headquarters in Michigan. According to Michele Tinson, spokeswoman for Chrysler the talks resumed later on Tuesday morning.
The UAW chief, Ron Gettelfinger sent a letter to its local officials and in the letter, the union chief said that there are many difficult issues that had already been discussed concerning wages and benefits. "The company has thus far failed to make an offer that adequately addresses the needs of our membership," Gettelfinger said on the letter, a copy was posted on the union��s website.
A strike may be fired up by the series of plant shutdown made by the recently privatized automaker to compensate for its non profitability and slack sales. Five Chrysler plants had already been idled and another one in Michigan is scheduled for shut down next week according to people familiar with the automaker��s plans on the matter.
The bargaining between UAW and Chrysler had idles after the automaker extended its contract with the union three weeks ago for the union intending to focus on America��s top automaker, GM. The three Detroit based automakers are employing almost 180,000 UAW members and Chrysler taking part for the 49,000 hourly-based employees has the smallest workforce, Ford employs almost 58,000 and GM has the largest with 73,000 UAW employees.
Last year, Chrysler, Ford Motor Co. and GM had lost $15 billion losing market shares to other rivals and this year, all three are struggling for their restructuring programs.
After GM, Gettelfinger turned to Chrysler LLC as the next bargaining target expecting that the union will find ways for Chrysler and its new owner, Cerberus Capital Management LP to follow some of the elements in its deal with GM. Gettelfinger is one of the supporters of Cerberus�� acquisition of Chrysler from Daimler AG for $7.4 billion earlier this year. However, Daimler AG is still holding 20 percent stake in Chrysler.
On September 26, after 37 years, the first nationwide strike was launched by the UAW against GM as the automaker failed to make adjustments for the union��s demands on job security and GM��s retiree health care obligations. After two days, the strike ended with a tentative deal provisioning for second tier wages for 17,000 new GM employees and the creation of a VEBA, a UAW controlled trust fund coming from GM.
An average factory worker at Chrysler is rated $75 per hour making it the highest among the automakers with Ford��s $70 per hour and Toyota��s $48 per hour. Because Chrysler is giving the highest labor cost, the union is a product of its limiting a round of the 2005 concessions on retiree health care to Ford and GM. In 2006, Chrysler��s concession with the UAW had caused the automaker to chase every dollar in the established tradition of the American auto industry of patterning deals.
Before the onset of the negotiations, Chrysler already announced that they are aiming to close the big gap of its labor cost with its Japanese rivals having facilities in the United States. Chrysler threatened that if the UAW won��t approve this, they may shift their production out of U.S. According to Chrysler executives, with its new owner, the automaker is also considering to spin off its assets to generate cash that alarmed the UAW and creating new issues on the bargaining table.
In a report in the Detroit Free Press, Chrysler is also mulling over cutting more from its white collar jobs than the automaker had initially planned.
In February, the same time that Daimler AG announced the sale of Chrysler, then CEO Tom Lasorda released the restructuring plan for Chrysler LLC involving 13,000 job cuttings that include 2,000 salaried positions as its tactic to return to profitability in 2009.
Daimler AG had finally ended its merge with Chrysler LLC as the sale had been completed earlier this year, to make the separation more final, the European automaker recently slashed the Chrysler name from its corporate name resulting to just Daimler AG. On its own, the world��s second largest premium car maker following BMW (makes BMW 330xi parts) is expecting that they will do better than with Chrysler around.
