UAW Contract with Chrysler May Be in Trouble

A proposed contract between Chrysler and the United Auto Workers could be in jeopardy. Workers in several large assembly plants have already voted against the four-year deal. The union is about halfway through the balloting, and the vote is too close to call right now.

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STEVE INSKEEP, host:

Some other news: A new labor contract with Chrysler could be in trouble. Members of the United Auto Workers are threatening to vote it down. The union is about halfway through the balloting and the vote is too close to call right now but if the union does reject Chrysler's contract, it will be the first time that's happened in 25 years.

NPR's Frank Langfitt reports.

FRANK LANGFITT: Employees at Chrysler's transmission plant in Kokomo, Indiana head to the ballot box today; among them will be Chris Ryan. He's 35 years old and delivers parts to a sub assembly line. He's also a member of Soldiers of Solidarity, a dissident union group. Ryan predicts the contract will sink.

Mr. CHRIS RYAN (Member, Soldier of Solidarity; Chrysler Employee): Oh, the mood right now it seems overwhelmingly - people are not going to vote for it. I would be surprised if it goes through.

LANGFITT: If Ryan is right the Kokomo plant will join others in Missouri, Delaware, Ohio, and Michigan that have already rejected the deal. The contract is filled with concessions by the union to help Chrysler survive in a fiercely competitive global market. So far only 53 percent of union member have approve the deal according to internal union data. That's a strikingly narrow margin. In the past ratification levels have been as high as 90 percent. I asked Ryan what he thought of the heavy opposition to this contract.

Mr. RYAN: Thrilled, very happy that they are standing firm on this.

LANGFITT: Many workers are against the deal because they think it gives away too much in benefits and secures too little in job guarantees. In exchange for concessions on health care and wages, Chrysler says it will invest $15 billion in auto products over the next four years. That sounds pretty good but General Motors had made even longer commitments. Many analysts, though, say Chrysler can't make those sort of promises. It was recently bought by a private equity firm Servers Capital which is revamping the entire operation.

Erich Merkle is vice president of Forecasting at IRN, an automotive consulting firm in Grand Repids.

Mr. ERICH MERKLE (Vice President, Forecasting, IRN): You kind of have a lot of new players at Chrysler that are now stepping back and they're questioning the product plan and what makes sense to the market going forward.

LANGFITT: Merkle says the company can't predict what it might build beyond the next two years.

Mr. MERKLE: No longer can they just say, well, you know, we're going to put the new Durango in plant X because, quite honestly, they don't know if there's going to be a new Durango.

LANGFITT: It's too early to know whether the union will vote down the Chrysler contract but it could become clear in the next couple of days after workers cast ballots at big plants in Indiana and Michigan. Voting could conclude by the end of the week. If the contract fails union leaders have several options: strike, hold another vote, or go back to the bargaining table. But that's risky too.

Mr. HART WHEATEN (Auto Industry Expert): What most people don't realize is that just because you go back to the table and negotiate doesn't mean you will get more - it usually get less.

LANGFITT: That's Hart Wheaten, an auto industry expert at Cornell. He says if the union tries to reopen the contract, the company could ask for even bigger concession.

Mr. WHEATEN: No one is ever happy with a concessionary agreement. I think the agreement is terrible but I don't think they should reject it.

LANGFITT: Chrysler won't comment on the contract publicly until the voting is complete but a company source did say this, quote, "my gut is if they go back to the table, this won't get any easier.

Frank Langfitt, NPR News.

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