UAW set to strike Chrysler Wednesday
Earlier reports had put Ford as the next target on the United Auto Worker’s list, but apparently the next target is Chrysler.
Ford talks are in standby mode, while talks with Chrysler have escalated. The UAW has set Wednesday as the deadline for reaching agreement, absent which the union may strike. It could also defer a strike if it believes the talks are progressing adequately.
The ploy is seen as a move to pressure Chrysler and its management. But, as a pressure tactic, it seems strange: Chrysler has already announced that it is suspending production at five plants in the United States for the next week to two weeks in order to reduce inventory of unsold vehicles.
Reports have said that both Chrysler and Ford are resisting making VEBA contributions as large, on a percentage basis, as those made by General Motors. Chrysler’s management is also thought to be opposed to providing guarantees that certain plants will remain open, another aspect of the GM/UAW contract.
Beyond this, however, Chrysler has some cause for resentment: two years ago, the union negotiated concessions in health care benefits for current workers at both Ford and General Motors, but refused to give Chrysler the same deal. At that time, Chrysler was part of DaimlerChrysler and the union took the position that Daimler could afford to pay the benefits.
In fact, the concessions scared the daylights out of the union’s leadership. After the concessions deal with Ford was negotiated, it was ratified by a 51% vote of the Ford members, exactly 1% more than required.
That means that the union is now caught in a bit of a jam: Chrysler’s union workers are paid more on average than those of any other automaker: $73.86 per hour, including all benefits. Having refused to negotiate concessions with Chrysler that it gave to the other automakers two years ago, any deal the union makes with Chrysler now is likely to appear, on the surface, to be making more concessions to that company than to the others. It is also going to require UAW workers at Chrysler to give up more than those at the other companies, because they currently have a better deal.
The UAW leadership, however, has real cause for concern if it agrees to a deal that gives its workers at the other two companies a smaller package than secured at GM. Of the 12 UAW locals to vote to date on the GM contract, 13 have voted for approval and 3 have voted against approval. While it requires only a simple majority of the total membership vote to ratify the contract, the degree of dissent against the GM contract must be of concern to the union leadership. While the votes against ratification at GM can be attributed, at least in part, to the plant closings negotiated in that contract, both Chrysler nor Ford are likely to want similar concessions from the union.