http://money.cnn.com/2007/10/10/news/companies/chrysler_uaw.ap/index.htm?cnn=yes
Strike deadline looms for UAW-Chrysler talks
Union and automaker remain locked in negotiations as thousands of workers prepare to walk off the job.
October 10 2007: 6:45 AM EDT
DETROIT (AP) -- The United Auto Workers union and Chrysler remained locked in all-night marathon negotiations early Wednesday as workers prepared for the picket lines.
The UAW set a deadline of 11 a.m. EDT to reach a tentative agreement with Chrysler LLC or have thousands of workers walk off the job. The union represents about 45,000 workers at 24 U.S. manufacturing facilities and other sites.
As of 6 a.m. ET, negotiators for the two sides were still at the table after talking through the night for the second straight night.
Tom LaSorda, the president of Chrysler and UAW President Ron Gettelfinger were involved in the current round of negotiations, a source familiar with the talks told CNNMoney.com, although he could not say if they were in the room as of 6 a.m.
Gettelfinger sent out a note to local presidents Monday in which he said that Chrysler had "thus far failed to make an offer that adequately addresses the needs of our membership" But he stopped short of saying that there would need to a complete agreement on a new contract to avoid a strike.
Rather, he wrote the union would walk off the job Wednesday morning "unless we have achieved the basis for a tentative agreement," suggesting that a broad framework for a deal would be all that would be needed to avoid the union's second work stoppage in three weeks.
UAW spokesman Roger Kerson declined to comment early Wednesday.
Chrysler eyes cutting 1,500 non-union jobs
The union is trying to use the deal reached at General Motors (Charts, Fortune 500) on Sept. 26 after a two-day strike as the pattern for an agreement with Chrysler.
That deal, which is undergoing a rank-and-file ratification process that is expected to be concluded Wednesday, shifts about $51 billion in future costs to provide healthcare to retirees and their family members to a union-controlled trust fund. It also provided the union job guarantees in the form of commitments to build future GM products at U.S. plants.
David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., said Tuesday that it appeared the GM contract would be ratified with about 60 percent of the vote despite protests from some members. The historic agreement establishes lower pay for some workers and puts GM's retiree debt into a UAW-run trust in exchange for promises of future work at U.S. plants.
Typically, the union crafts an agreement with one Detroit automaker and then persuades the other two to match its terms. But it was unclear how much of GM's contract Chrysler would want to adopt. The UAW is expected to bargain with Ford Motor Co. (Charts, Fortune 500) last.
Chrysler entered the talks seeking health care cost concessions that the UAW already granted to GM and Ford in 2005. Bargaining also has centered on how much Chrysler would pay into a company-funded, union-run trust that would take over its unfunded retiree health care costs, estimated at $18 billion.
The union agreed to the creation of such a trust last month in GM's contract, but GM needed the trust more than Chrysler because it has 340,000 retirees and surviving spouses - compared with 78,000 at Chrysler - and billions more in retiree debt.
Also at issue are the union's desire for job security pledges at U.S. factories and Chrysler's wish to contract out work now done by higher-wage union members, according to a person briefed on the talks. The person requested anonymity because the talks are private.
If there is a strike at Chrysler, it would be the first one to hit the automaker since 1985, when the union struck select locations for 12 days. The company has never seen a nationwide strike, according to company spokeswoman Michele Tinson.
At factories and union halls Tuesday, workers filled out paperwork for strike pay and signed up for picket duty.
Charles Spencer, president of Local 122 in Twinsburg, Ohio, whose members work at a Chrysler stamping plant there, said the threat of a strike was catching some of the rank and file by surprise.
"It's slowly sinking in that they will be on strike," he said. "Probaby 65 percent of my membership has never been on strike. Myself, I've been through four strikes. I survived, they'll survive. We're all ready to do whatever they ask us to do to support the union negotiators."
Some workers said they didn't know what to expect from the talks because Chrysler recently became a private company. Daimler AG finalized the sale of a majority share in Chrysler to the private equity firm Cerberus Capital Management LP in August, shortly after the contract talks began.
Melvin Thompson, president of a UAW local at a Chrysler truck plant in Warren, Mich., near Detroit, said there is uncertainty in having a new bargaining partner.
"There is a difference," he said. "We don't know what that difference is yet."
It would be to Cerberus' advantage to settle some of Chrysler's labor cost issues in the new contract without a lengthy strike, said Standard & Poor's credit analyst Gregg Lemos-Stein.
"One would have to imagine if their return on investment would be superior if they were to achieve a contract that would address some of these very serious legacy cost issues," he said.
Analysts agreed that a short-term strike would have little effect on Chrysler and might even help the company reduce inventory. Chrysler had a 71-day supply of cars and trucks on dealer lots at the end of August, according to Ward's AutoInfoBank. An ideal supply is around 60 days.
But a walkout that lasts longer than a month would start to cut into sales, said Paul Taylor, chief economist with the National Automobile Dealers Association. Taylor said a strike could hurt sales of hot-sellers like the Chrysler Aspen sport utility vehicle and Jeep Wrangler four-door. Chrysler also is in the middle of the critical launch of its new minivans.
Chrysler said it already planned to idle five assembly plants and some parts making factories for short stretches during the next two weeks in an effort to adjust its inventory to a slowing U.S. automotive market. Top of page
GM deal: big stakes, questions
Strike deadline looms for UAW-Chrysler talks
Union and automaker remain locked in negotiations as thousands of workers prepare to walk off the job.
October 10 2007: 6:45 AM EDT
DETROIT (AP) -- The United Auto Workers union and Chrysler remained locked in all-night marathon negotiations early Wednesday as workers prepared for the picket lines.
The UAW set a deadline of 11 a.m. EDT to reach a tentative agreement with Chrysler LLC or have thousands of workers walk off the job. The union represents about 45,000 workers at 24 U.S. manufacturing facilities and other sites.
As of 6 a.m. ET, negotiators for the two sides were still at the table after talking through the night for the second straight night.
Tom LaSorda, the president of Chrysler and UAW President Ron Gettelfinger were involved in the current round of negotiations, a source familiar with the talks told CNNMoney.com, although he could not say if they were in the room as of 6 a.m.
Gettelfinger sent out a note to local presidents Monday in which he said that Chrysler had "thus far failed to make an offer that adequately addresses the needs of our membership" But he stopped short of saying that there would need to a complete agreement on a new contract to avoid a strike.
Rather, he wrote the union would walk off the job Wednesday morning "unless we have achieved the basis for a tentative agreement," suggesting that a broad framework for a deal would be all that would be needed to avoid the union's second work stoppage in three weeks.
UAW spokesman Roger Kerson declined to comment early Wednesday.
Chrysler eyes cutting 1,500 non-union jobs
The union is trying to use the deal reached at General Motors (Charts, Fortune 500) on Sept. 26 after a two-day strike as the pattern for an agreement with Chrysler.
That deal, which is undergoing a rank-and-file ratification process that is expected to be concluded Wednesday, shifts about $51 billion in future costs to provide healthcare to retirees and their family members to a union-controlled trust fund. It also provided the union job guarantees in the form of commitments to build future GM products at U.S. plants.
David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., said Tuesday that it appeared the GM contract would be ratified with about 60 percent of the vote despite protests from some members. The historic agreement establishes lower pay for some workers and puts GM's retiree debt into a UAW-run trust in exchange for promises of future work at U.S. plants.
Typically, the union crafts an agreement with one Detroit automaker and then persuades the other two to match its terms. But it was unclear how much of GM's contract Chrysler would want to adopt. The UAW is expected to bargain with Ford Motor Co. (Charts, Fortune 500) last.
Chrysler entered the talks seeking health care cost concessions that the UAW already granted to GM and Ford in 2005. Bargaining also has centered on how much Chrysler would pay into a company-funded, union-run trust that would take over its unfunded retiree health care costs, estimated at $18 billion.
The union agreed to the creation of such a trust last month in GM's contract, but GM needed the trust more than Chrysler because it has 340,000 retirees and surviving spouses - compared with 78,000 at Chrysler - and billions more in retiree debt.
Also at issue are the union's desire for job security pledges at U.S. factories and Chrysler's wish to contract out work now done by higher-wage union members, according to a person briefed on the talks. The person requested anonymity because the talks are private.
If there is a strike at Chrysler, it would be the first one to hit the automaker since 1985, when the union struck select locations for 12 days. The company has never seen a nationwide strike, according to company spokeswoman Michele Tinson.
At factories and union halls Tuesday, workers filled out paperwork for strike pay and signed up for picket duty.
Charles Spencer, president of Local 122 in Twinsburg, Ohio, whose members work at a Chrysler stamping plant there, said the threat of a strike was catching some of the rank and file by surprise.
"It's slowly sinking in that they will be on strike," he said. "Probaby 65 percent of my membership has never been on strike. Myself, I've been through four strikes. I survived, they'll survive. We're all ready to do whatever they ask us to do to support the union negotiators."
Some workers said they didn't know what to expect from the talks because Chrysler recently became a private company. Daimler AG finalized the sale of a majority share in Chrysler to the private equity firm Cerberus Capital Management LP in August, shortly after the contract talks began.
Melvin Thompson, president of a UAW local at a Chrysler truck plant in Warren, Mich., near Detroit, said there is uncertainty in having a new bargaining partner.
"There is a difference," he said. "We don't know what that difference is yet."
It would be to Cerberus' advantage to settle some of Chrysler's labor cost issues in the new contract without a lengthy strike, said Standard & Poor's credit analyst Gregg Lemos-Stein.
"One would have to imagine if their return on investment would be superior if they were to achieve a contract that would address some of these very serious legacy cost issues," he said.
Analysts agreed that a short-term strike would have little effect on Chrysler and might even help the company reduce inventory. Chrysler had a 71-day supply of cars and trucks on dealer lots at the end of August, according to Ward's AutoInfoBank. An ideal supply is around 60 days.
But a walkout that lasts longer than a month would start to cut into sales, said Paul Taylor, chief economist with the National Automobile Dealers Association. Taylor said a strike could hurt sales of hot-sellers like the Chrysler Aspen sport utility vehicle and Jeep Wrangler four-door. Chrysler also is in the middle of the critical launch of its new minivans.
Chrysler said it already planned to idle five assembly plants and some parts making factories for short stretches during the next two weeks in an effort to adjust its inventory to a slowing U.S. automotive market. Top of page
GM deal: big stakes, questions
