UAW sets tomorrow as deadline at Chrysler

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A Jeep is inspected at a Chrysler plant in Toledo, Ohio, in a 2006 photo. Chrysler's compensation of UAW employees is the highest among the three U.S. automakers.

DETROIT - If there was a script that automakers were supposed to follow for UAW contract talks, Chrysler seemed to have overlooked it.

As negotiations continued yesterday at Chrysler L.L.C.'s Auburn Hills headquarters, the United Auto Workers set a deadline of tomorrow morning to agree on a new contract, or employees could strike.

The deadline may be a tactic the union is using to squeeze more concessions from the company. But it also is possible that Chrysler may not be willing to agree to the same terms that General Motors Corp. accepted last month just because that is what generally happens in auto-industry negotiations.

Chrysler's needs are different from GM's, 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 reductions.

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

The UAW went on strike for nearly two days last month before reaching a tentative agreement with GM on Sept. 26. Workers with the nation's largest automaker were expected to wrap up voting on the agreement by tomorrow.

The union normally settles with one U.S. automaker and then uses that deal as a pattern for an agreement with the other two.

Among the differences this time, analysts say, are health-care givebacks granted to GM and Ford Motor Co. in 2005 that Chrysler did not receive, worth about $340 million a year.

Higher health-care costs are one big reason why Chrysler compensates 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 were 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 oppose giving specific job-security promises by guaranteeing new cars and trucks will be built at U.S. factories. Chrysler also wants to hire out parts transportation rather than pay full UAW wages for it, the analysts said.

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

In talks with GM, UAW president Ron Gettelfinger bargained for job security in return for taking on the retiree health-care costs and accepting a limited lower pay scale for new hires.

Chrysler spokeswoman Michele Tinson would not comment on specifics of the talks other than to say they were progressing. UAW spokesman Roger Kerson also would not comment.

At the company's Newark, Del., assembly plant, workers were taking the possibility of a strike seriously yesterday, beginning to staple together picket signs, said Richard McDonaugh Jr., president of UAW Local 1183.

"No one wants to strike, but sometimes it's the cost of doing business," said McDonaugh, whose sport-utility vehicle plant is scheduled to be idled in December 2009 if it doesn't get a new product.


Chrysler Talks

Strike deadline: 11 a.m. tomorrow.

Union workers: 49,000 represented by the UAW.

Average pay: $75.86 an hour for wages, pension and health care.

Retirees and surviving spouses: 78,000 receiving company pensions and health insurance.

Previous contract: Expired Sept. 14.

Chrysler's 2006 loss: $680 million.

SOURCE: Inquirer wire services