Agreement ends brief strike against Chrysler

updated 10:44 a.m. ET Oct. 11, 2007

DETROIT - It took two short strikes, but the United Auto Workers union has new contracts with General Motors and Chrysler, and now it will move on to struggling Ford.

The union tentatively agreed on a four-year deal with Chrysler LLC on Wednesday after a six-hour walkout. News of the pact came shortly after the UAW announced that union workers had ratified a four-year agreement with General Motors Corp.

But Ford Motor Co., which lost $12.6 billion last year, could be the toughest bargainer yet because of its weakened financial position. Industry analysts have said that Ford likely will seek a different deal than Chrysler and GM, perhaps with deeper concessions.

Ford spokesman Marcey Evans said Wednesday night the company had not heard from the union on when talks might resume.

A person with knowledge of the Chrysler agreement said it includes some guarantees that vehicles will be produced at U.S. factories, a company-funded union-run trust that will pay much of Chrysler’s $18 billion in long-term retiree health care costs, and a lower wage scale for some newly hired workers.

The person, who requested anonymity because the contract has not been ratified by union members, said Chrysler’s vehicle guarantees, which translate into job security for union workers, are not as extensive as those given by GM.

The guarantees are in many cases only for the life of current products, the person said. GM made guarantees at many factories that include the next generation of cars, trucks and parts.

The new lower wage scale, the person said, covers new hires who would replace Chrysler Mopar parts transportation workers. Buyout and early retirement offers would be made to current workers in an effort to get them to leave, the person said.

The lower wage scale is similar to the one negotiated by GM, the person said.

UAW President Ron Gettelfinger wouldn’t release details of the agreement with Chrysler, which is now 80.1 percent owned by private equity firm Cerberus Capital Management LP.

“This agreement was made possible because UAW workers made it clear to Chrysler that we needed an agreement that rewards the contributions they have made to the success of this company,” Gettelfinger said in a statement.

On Thursday morning, Gettelfinger said the tentative agreement with Chrysler generally followed the pattern set by the GM agreement.

“We like to do a little, you know, adjustment, depending on the company that we’re at,” Gettelfinger said during an interview on “The Paul W. Smith Show” on WJR-AM. “But in this case, it’s basically a pattern agreement.”

The union normally settles with one U.S. automaker and then uses that agreement as a pattern for the other two. But several industry analysts had said that Chrysler and Ford had different needs than GM.

Gettelfinger, however, said Thursday he expects Ford to generally follow the same pattern in an agreement. He said the contract is designed so Ford “should be able to pretty much take that agreement and put it in place.”

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