Chrysler, the smallest of the Detroit Three, has agreed to a new Chrysler UAW contract it was announced this morning. The UAW Chrysler proposed agreement includes $4.5 billion of investment to produce new models and upgraded vehicles and components by 2015, all of which will go directly into retooling and upgrading plants.
At first look it appears to be a major victory for Sergio Marchionne, CEO of the Italian-controlled company, who was determined to hold the line on costs, which because of the U.S. government forced bankruptcy in 2009 are at $49 an hour – competitive with non-union auto plants. The UAW had a minor victory, as well. Marchionne sought to extend his ability to keep an unlimited number of workers at the “New Hire” wage, but instead, a 25% cap will be reinstated at the end of this contract, as outlined in the bankruptcy settlement agreement. At that time, all workers in excess of the 25% cap will begin receiving the same wages as traditional Chrysler workers.
Jobs, investment and product guarantees in the tentative agreement include:
- Belvidere, Ill., New compact vehicle.
- Sterling Heights, Mich., New compact vehicle.
- Kokomo, Ind, New Front Wheel Drive 9 Speed transmission; new Rear Wheel Drive 8 Speed.
- Toledo, Ohio, Next generation steering columns, FRW and RWD Torque Converters.
- Trenton, Mich., Reutilize portion of the Trenton North Engine Plant to produce an incremental volume (150,000 units) of 3.8L V-6.
“It’s a new day at Chrysler,” said UAW President Bob King. “In less than 3 years, Chrysler, through the dedication and hard work of its UAW-represented workers, has emerged from bankruptcy, repaid its federal loans six years early and is now helping drive the U.S. economy. Through this collective bargaining agreement, we are adding jobs and helping to rebuild America. This proposed contract builds on the momentum created from the UAW General Motors and Ford Motor Co. agreements and will bring 2,100 new jobs to America,” King added.
Economic improvements in the tentative agreement include a $3,500 ratification bonus and $1,000 in annual bonuses for performance and quality, in addition to a new, more transparent profit sharing program and “Upside Bonus” that will begin paying at the point Chrysler achieves financial stability.
So called New Hire workers will see wages increase to $19.28 over the four year term of the agreement – following the pattern established at GM and Ford. Chrysler workers with more than two years service will begin receiving the $19.28 maximum rate. New Hire workers will be eligible for tuition assistance programs, unlimited $25 co-pay for doctor’s office visits, life insurance and other benefits.
The UAW represents 26,000 employees at Chrysler, including 3,000 salaried employees at 48 Chrysler facilities in the United States, making vehicles and components with the Chrysler, Jeep, Dodge, Mopar and Ram Truck brands.
The UAW reached a tentative agreement with GM on Sept. 16 and with Ford on Oct 4. The GM agreement was ratified by UAW members with a 2:1 ratio on Sept. 28. The Ford agreement is pending ratification by UAW members. Voting at Ford will be completed by Oct. 18.
