Chrysler Group can expect a bitter fight in its bid to win wage and health-care benefit concessions from the United Auto Workers union, which represents its hourly employees.
The auto maker hopes to reach a deal by the end of the third quarter, President and CEO Tom LaSorda tells Ward's at a recent event in Windsor, Ont., Canada.
But there is little indication the union will bend.
“It's not going to happen,” delegate Jim Rowe of Local 12, which represents Chrysler workers at the auto maker's assembly complex in Toledo, OH, says at the UAW's 34th Constitutional Convention in Las Vegas.
Chrysler is seeking labor-cost reductions in the wake of concessions made by the UAW at General Motors Corp. and Ford Motor Co. Chrysler is invoking the UAW principle of “pattern” agreements that compels Detroit auto makers to match the wage and benefit packages of their competitors.
“We have to meet it,” LaSorda says. Otherwise, the UAW will be putting Chrysler at a competitive disadvantage, the auto maker has said — and its once-rosy numbers are slipping. Chrysler, a division of DaimlerChrysler AG, reported a third-quarter operating profit of $144 million, a decline of 53% compared with year-ago.
Meanwhile, the UAW and Delphi Corp. agreed to early retirement and buyout programs that would enable the bankrupt supplier to reduce its hourly workforce.
Pending court approval, the deal between Delphi and the UAW expands the scope of the supplier's attrition program.
Employees covered by the UAW's labor contract with Delphi, and having at least 26 years of credited service, regardless of age, are eligible for early retirement.
In addition, eligible employees with more than 10 years' seniority are being offered $140,000 to leave the company. Those with less than 10 years are eligible to receive $70,000.
