Wednesday, November 2, 2011

Union approves new contract with Chrysler

DETROIT — Members of the United Auto Workers union approved a new four-year labor contract with Chrysler on Wednesday, though many voted against the pact.

The approval means that all three Detroit automakers have signed deals with the union and labor peace is likely at least through September of 2015.

The contracts, reached without strikes or arbitration, should help the union in its efforts to organize workers at U.S. factories owned by foreign automakers, UAW President Bob King said. The UAW has made progress with the companies in confidential discussions, he said, but he would not identify which company the UAW will focus on first.

Overall, about 55 percent of workers casting ballots voted for the contract with Chrysler and 45 percent opposed it.

Salaried and production workers across the U.S. voted in favor of the deal, but skilled trades workers such as electricians and pipe fitters voted it down. So under the union's Constitution, the executive board made the final decision to ratify the pact.

Under the deals, most workers at Chrysler, Ford and General Motors won't get pay raises. But they'll get signing bonuses, profit sharing and other payments. The deals also promise at least 13,000 new jobs at all three companies and give raises to a small number of entry-level workers who make about half the pay of a longtime UAW member.

About 56 percent of skilled trades workers voted against the contract, forcing the executive board to meet by teleconference. The board declared the contract ratified after determining that skilled trades workers voted the deal down mainly for economic reasons that weren't unique to their jobs.

The union and Chrysler reached a tentative agreement on the new contract Oct. 12, and Chrysler Group LLC's 26,000 workers finished voting on the deal Tuesday night.

The Chrysler deal includes a $3,500 signing bonus, and its profit-sharing checks are far lower than workers will get at Ford Motor Co. and General Motors Co. Ford's signing bonus is $6,000, while GM's is $5,000. Chrysler Group LLC has yet to make a full-year profit since it emerged from bankruptcy protection in 2009, while GM and Ford have each made billions.

Chrysler workers were barred from striking over wages under the terms of the company's 2009 government bailout.

Chrysler hasn't made an annual profit since 2005. The company earned $116 million in the first quarter, its first quarterly net profit in five years. But it lost $370 million in the second quarter, mostly because of charges for refinancing government debt. The company is likely to announce a third-quarter profit when it reports earnings on Friday.

Chrysler expects to earn $200 million to $500 million this year, excluding the debt charges. But the profit is tiny compared with its Detroit rivals. Ford reported a profit of $6.6 billion last year, while GM earned $4.7 billion.

The Chrysler deal promises up to 2,100 new jobs and investment of $4.5 billion in U.S. factories.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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