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UAW sets Wednesday strike deadline for Chrysler as talks resume

09.10.2007 12:02 Headlines

DETROIT — If there were a script that automakers were supposed to follow for United Auto Workers contract talks, Chrysler seems to have overlooked it.

As negotiations continued Monday at Chrysler LLC's headquarters, the UAW set a deadline of Wednesday morning to agree on a new contract, or else workers could strike.

The deadline may be a tactic the union is using to squeeze more concessions from the company. But it also may be that Chrysler won't just agree to the same terms that General Motors Corp. did last week simply because that's how it's traditionally done.

Chrysler's needs differ from GM's requirements, analysts said, so a deal requires cost cuts in different places.

The union may have set the strike deadline for its 49,000 hourly workers because of how far Chrysler wants to push for cost cuts.

"We think that they may be holding out for something more than GM got," said Aaron Bragman, an industry analyst for Global Insight.

The UAW went on strike for nearly two days last month before making a tentative agreement with GM on Sept. 26.

Among the differences, analysts say, are health care givebacks granted to GM and Ford Motor Co. in 2005 that Chrysler didn't get, worth approximately $340 million a year.

A person briefed on the negotiations said the two sides have not agreed on giving the same deal to Chrysler. The person requested anonymity because the talks are private.

Higher health care costs are one big reason why Chrysler pays its workers an average of $75.86 per hour in wages, pension and health care costs, the highest among the Detroit automakers.

Several analysts also said the company and union likely are apart on setting up a Chrysler-funded union-run trust that would take on the company's roughly $18 billion 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 U.S. factories. It wants to hire out parts transportation rather than pay full UAW wages for it, analysts said.

Job security could be a tough issue because Chrysler and its new owner, Cerberus Capital Management LP, would be reluctant to commit to huge investments when the company is looking at potentially cutting some models, said David Cole, chairman of the Center for Automotive Research.

As a bargaining chip, Chrysler could make previously announced new factory investments contingent on a new agreement, Cole said.

In addition to the 49,000 active workers, Chrysler also has about 78,000 hourly retirees and surviving spouses.

Original text is here



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