The United Auto Workers union has launched a national strike against Chrysler LLC after all-night negotiations failed to produce a tentative agreement on a new labour contract, a Detroit newspaper reported.
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The Detroit News said over 45,000 UAW members took to the picket lines at Chrysler plants across the US in the second national walkout against one of Detroit’s Big Three during this year’s contract talks.
According to the New York Times, the only exception was five plants that already had been temporarily shut down. Those plants are in Newark, Delaware; Belvidere, Illinois; Warren, Michigan, and two plants in Detroit. A union official told those workers not to join the strike, because they receive their pay and benefits from the company when they are temporarily laid off. Otherwise, workers receive strike pay, the paper said.
The paper added that the strike may not have much immediate impact on supplies of cars at dealer lots. Chrysler has at least three months’ worth of most vehicles in stock and shut half of its United States assembly plants this week to let those inventories thin out. Its most important new vehicles, a pair of minivans and the Jeep Wrangler, would keep rolling off assembly lines, because the Wrangler factory in Ohio has a separate labor contract and one of the two minivan factories is in Canada, the New York Times said.
The Detroit News said bargainers for Chrysler and the UAW worked through the night in a marathon session at the company’s headquarters in Auburn Hills, but were unable to agree on critical issues of job security and health-care funding.
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By GlobalDataThere was no immediate comment from Chrysler or the union, the Detroit News noted. UAW president Ron Gettelfinger had informed UAW locals [branches] on Monday to be prepared for a strike if the “basis for a tentative agreement” was not in place by 11am Detroit time (4pm UK time) on Wednesday.
The paper noted that the Chrysler walkout follows a two-day strike at General Motors that ended on 26 September when the UAW and GM reached agreement on a new four-year contract. GM workers were expected to complete ratification votes on the deal today.
While GM and the UAW hammered out a contract that created a health-care trust for retirees and guaranteed jobs for active workers, Chrysler and the union have thus far failed to come to terms, the Detroit News said. People close to the talks reportedly said Gettelfinger and Chrysler president Tom LaSorda led the negotiations Tuesday and today, but a deal was not in place by the 11am deadline.
The negotiations are the first for Chrysler as a privately-owned corporation – it was acquired for $7.4bn in August by private equity firm Cerberus Capital Management after spending the past nine years as a division of DaimlerChrysler, renamed Daimler on 4 October.
During the GM strike, negotiators for the UAW and the company returned to the bargaining table within hours of the start of the walkout but the Detroit News said it was not clear when Chrysler and the union would resume negotiations.
People familiar with the talks had told the Detroit Free Press on Tuesday that progress was being made, but that it was slow.
“The negotiations appear very intense – hard to read if that means a roadblock or if it means they are making progress,” Harley Shaiken, a labour expert from the University of California at Berkeley, told the Detroit Free Press, adding: “This is a defining moment for the industry. Under more normal times, the negotiating of the pattern at the lead company makes it easier at the remaining automakers. This time around, it may be easier but not by much.”
The paper noted that experts have said a protracted strike against Chrysler could be devastating, though a short one might be softened by the fact that Chrysler has idled five assembly plants and one engine plant this week.
The Associated Press said the 11am Wednesday deadline suggested Chrysler wasn’t going to just agree to the same contract terms as General Motors.
“We think that they may be holding out for something more than GM got,” Aaron Bragman, a Global Insight industry analyst told AP.
Chrysler is likely to make another round of buyout or early retirement offers to salaried employees and cut contract workers in an effort to reduce its white-collar work force by about 1,500 more people, a person briefed on the plan told the news agency on Monday.
Several analysts also told AP the company and union likely were apart on setting up a Chrysler-funded union-run trust that would take on the company’s roughly $US18bn in retiree health care costs. Unlike GM, Chrysler also may be against giving specific job security promises by guaranteeing new cars and trucks will be built at US factories, and it wants to hire out parts transportation rather than pay full UAW wages for it, the analysts were reported to have said.
Job security could be a tough issue because Chrysler and its new owner, Cerberus Capital Management, would be reluctant to commit to huge investments when the company is looking at potentially cutting some models, David Cole, chairman of the Centre for Automotive Research in Ann Arbor, told the Associated Press.
