Rank-and-file members of the United Auto Workers union have approved a new four-year labour contract with the struggling Chrysler unit of DaimlerChrysler, the union said on Friday, according to Reuters.
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The news agency said the UAW did not give voting results on the contract, which calls for four plant closings and thousands of expected layoffs at Chrysler, and union spokesman Roger Kerson declined comment.
Reuters noted that, in the past, the UAW, whose membership has declined dramatically over the past two decades, has disclosed by what margin its contracts with Detroit’s Big Three car makers were approved.
The Chrysler deals cover more than 60,000 active UAW workers, as well as more than 57,000 retirees and 17,500 surviving spouses of retired workers, the report said.
Reuters said the labour pacts recently agreed with the Big Three capped about two months of tough negotiations and call for the closure or sale of up to 10 US plants, along with an estimated 50,000 layoffs, as the Detroit-based car makers struggle to compete with foreign rivals while battling declining market share, falling prices and billions of dollars in health care and pension liabilities.
Emblematic of those struggles is Chrysler, which reported an operating loss of $1.1 billion in the second quarter and has seen its US market share plunge in recent months, while has lost nearly $6.5 billion over the past two years, Reuters said.
According to Reuters, under the new contracts, UAW workers will largely retain the generous health care benefits they had under their previous agreements, which were signed when the US car industry was riding high in 1999, but co-payments for brand-name prescription drugs for active employees will double, and annual base wage hikes were limited to 5% over four years, compared with 12% in the previous contracts.
Reuters noted that, despite those and other concessions, including the partial lifting of a ban on plant closings introduced in previous contracts, a growing chorus of industry analysts have said the new labour agreements will fail to close the competitive gap between Detroit and foreign car makers.
