UAW-Chrysler Contract Might Not Be Ratified By Rank-and-File Members

Main Category: Health Insurance / Medical Insurance
Also Included In: Seniors / Aging
Article Date: 23 Oct 2007 - 11:00 PDT

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Six large locals over the weekend rejected a tentative deal between United Auto Workers and Chrysler Group, raising the probability that the contract will not receive enough rank-and-file votes for ratification, USA Today reports (Silke Carty, USA Today, 10/22).

Some leaders were unhappy about Chrysler not naming specific future product guarantees to U.S. factories and not moving temporary workers to permanent positions, which was part of General Motors' contract.

Under the contract, Chrysler would contribute $8.8 billion to a voluntary employees' beneficiary association that would be managed by the union, shifting retiree health care liabilities away from the automaker. Chrysler would pay about $1.5 billion in 2008 and 2009 for retiree health care liabilities before the VEBA assumes them in 2010. The deal also would create a two-tier wage system similar to the one created at GM (Kaiser Daily Health Policy Report, 10/18).

Chrysler workers reportedly are unhappy with the two-tier wage system and the lack of production guarantees at U.S. plants. Richard Block, acting director of the School of Labor and Industrial Relations at Michigan State University, said that Chrysler and UAW could head back into the bargaining room if the contract is not ratified. However, additional negotiations would take place only if there is an easy fix to the contract, he said. Block added that if the disagreements are more complicated, UAW might move on to Ford Motor -- the last of the Big Three to discuss a new contract (Morath/Aguilar, Detroit News, 10/22). If Chrysler and UAW renegotiate the contract, it could further delay talks at Ford, according to the Wall Street Journal (McCracken et al., Wall Street Journal, 10/22).

Several collective-bargaining experts said that if the Chrysler deal is rejected, there could be a revote, negotiations could resume, there could be another strike, Chrysler could lock out workers or the automaker could hire replacement workers (Higgins, Detroit Free Press, 10/22). If the deal is rejected, it is unlikely that Chrysler would give more concessions to the union, the Journal reports (Wall Street Journal, 10/22).

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