Despite Thursday’s announcement of 8,500-10,000 additional job cuts, which senior management has since hinted may not be permanent, the United Auto Workers (UAW) union on Saturday said workers at Chrysler had “brought home a new contract with unprecedented product and investment commitments”.
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“With the protection of US manufacturing jobs at the top of the union’s bargaining agenda, UAW negotiators insisted on – and won – solid pledges from Chrysler to build specific vehicles and components in specific plants,” the union said in a contract summary published on its website.
It said its bargainers were successful in turning back a demand by the company to divest all Mopar parts distribution centres (PDCs) and to close Chrysler Transportation. Cleveland PDC, which was scheduled to close, will stay open.
“Chrysler workers joined the fight for US jobs, and made significant gains on behalf of our members and our communities,” said UAW president Ron Gettelfinger in the statement.
The union said the tentative agreement, reached on the afternoon of 10 October [and subsequently ratified by a small majority], also delivers economic gains for UAW active and retired members.
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By GlobalData“The agreement will provide more than $US10,000 in economic gains for a typical UAW member over the life of the four-year agreement, including a $3,000 signing bonus, two 3% lump sums and a 4% lump sum,” the union added.
The UAW said active workers wold see their comprehensive health care coverage continue as Chrysler pays $10.3bn to secure future health benefits for retirees, including $8.8bn to fund a voluntary employee beneficiary association (VEBA).
The fund, to be independently administered, can only be used to pay retiree health benefits, and will remain solvent for decades regardless of the financial condition of Chrysler, the UAW claimed.
The company will pay an additional $1.5bn to pay for retiree benefits from now until 2010, when the VEBA becomes operational.
The proposed contract will also deliver benefits to current and future UAW Chrysler retirees, with four lump-sum payments for current retirees, and a raise in basic benefit rates, the 30-and-out- supplement, and temporary and interim benefits for future retirees, the UAW said.
“Chrysler had an agenda that was nothing but cutbacks, but our membership turned the company around,” said UAW vice president General Holiefield, who directs the union’s Chrysler Department.
“We saved plants, we saved parts distribution centres and we saved jobs.”
But the union noted that members would make sacrifices: The new agreement also requires contributions from active UAW members to benefit retirees and an adjustment in wage schedules to encourage new hiring at Chrysler.
Resources that would have gone to a general wage increase for active workers will instead be used to contribute to the VEBA to fund retiree health care benefits, and Chrysler will have the right to hire entry-level workers at a lower wage rate for certain “non-core” operations.
“This is an agreement that deals with the current reality of our industry,” said Holiefield. “We set the stage to encourage future growth.”
