New Chrysler Contract Hinges on Jobs, Health Care

In Depth: The Man Leading the UAW

Right now, Ron Gettelfinger may have the hardest job in American labor. He runs the United Auto Workers, which imposed a nationwide strike against General Motors on Sept. 24, 2007. It ended two days later. And, workers at Chrysler reached an agreement on Oct. 10, 2007 after briefly walking off the job.


Read a profile of the man who leads the union as it tries to play a weak hand in dangerous times.

A six-hour United Auto Workers walkout against Chrysler ended Wednesday with a new tentative agreement between the automaker and its workforce.

The new agreement is part of a landmark effort by Detroit-based car companies to slash costs so they can compete against such foreign rivals as Toyota and Honda.

The UAW's next and final target for negotiations is Ford. The company is widely seen as the weakest financially of the Detroit Three car makers.

Under the new contract with Chrysler, the union would take over responsibility for billions of dollars in retiree health-care obligations.

In exchange, Chrysler is offering workers some job guarantees.

Chrysler's 45,000 employees could begin voting on the contract within a week.

As strikes go, the UAW's latest was very short. Workers left before noon and by supper time the picket signs were down.

Sean McAlinden, a Michigan auto analyst, put it like this: "It was longer that a coffee break, but shorter than a shift."

Neither the union nor the company would say publicly what prompted the strike or its quick end. They wouldn't talk about the specifics of the contract, either.

But a person with knowledge of the negotiations provided these key details: Chrysler will pay much of the $18 billion it owes for future retiree health care into a trust fund that the union will manage.

That removes a growing expense that Chrysler can't control.

The company will continue to build some products in U.S. factories, ensuring the preservation of some union jobs.

In a statement, Tom LaSorda, Chrysler's Vice Chairman and President, said the contract "Balances the needs of our employees and company by providing a framework to improve our long-term manufacturing competitiveness."

But Chrysler did not make as big a commitment to new vehicles as General Motors did in its contract with the UAW last month, suggesting the union didn't get the assurances it had hoped for.

McAlinden says that points to a big difference between the two companies and their goals.

"GM is a classic automotive firm," McAlinden said. "They're in it for the long haul, and they produced a long-haul UAW agreement, that says 'We're going to save money on this agreement, but it's going to take four years to roll out and we're going to do it with a lot of new product.'"

Chrysler, on the other hand, was recently bought by Cerberus Capital, a private investment company that buys other firms, restructures them and then tries to sell them or take them public for a healthy profit.

"Cerberus is a private equity firm, who in the past hasn't really taken over a company to increase its product line," McAlinden said.

The stakes in the contract are huge and some union members were energized by the strike.

"To me this is history for us," said Eli Ervin, 45, who works at the Chrysler plant in the Detroit suburb of Sterling Heights, Mich. "This is my first strike. I kind of enjoyed it."

Dan Tucker, a 49-year-old dye-maker, saw the strike as an important way to stand up to Chrysler's new owner. He said he's disappointed the walkout ended so quickly.

"I was hoping we'd stay out longer to show that we're serious," he said. "That our membership is serious about fighting. That we're not just gonna lay down and quit. We're gonna fight."

Tucker doesn't know what's in the new contract. And he's concerned about what Cerberus might do to Chrysler.

Like most U.S. auto workers these days, he is afraid his job could be sent overseas.

"It took me 16 years to become a dye-maker and all the dye-making jobs are going to Korea, China, wherever else they can ship and get cheap labor," he said.

In the coming days, the union will lay out the new contract to Tucker and about 45,000 members at Chrysler.

Then they will have to decide whether this new deal is one they can live with.

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