Report: Chrysler, Ford Not Interested in GM's Cookie-Cutter UAW Contract

By Jason Davis | September 20, 2011
While General Motors and the United Auto Workers iron out final details on a new contract agreement, word is that Chrysler and Ford aren't privy to a similarly patterned pact. Though not all of GM’s contract details have been released, the leaked information included concessions such as $2- to $3- dollar wage increase for 2500 entry-level workers, $5000 signing bonus, and greater profit-sharing measures. These concessions are reportedly too rich for cash-strapped Chrysler, and likely too lean for the workers at flourishing Ford, the only domestic manufacturer that refused a government bailout in 2008. The UAW has attempted, in the past, to streamline a single labor contract for the Detroit Three. But that tactic won't fly in the current economy as, like Sergio Marchionne, Chrysler CEO, points out to Agenzia Giornalistica Italia, "GM and us are in two completely different positions. We were born in 2009, into very different situations. I had an $8 billion euro debt, they had a $50 billion dollar capital." Chrysler, which is smaller and less profitable than GM and Ford, paid off its government debt early this year, but has reportedly vowed not to go beyond a $49 per hour wage, including benefits, for its workers. This is less than the $56 per hour to GM workers, and $58 per hour for Ford's workers, but Marchionne, who will return to negotiations with UAW today, was confident that a deal could happen quickly. Ford, too, is closely monitoring the negotiations, aware that similar bargaining ploys will shape its own contract. And that's where the trouble lays. Since Ford did not take a government bailout, its workers are not held by a no-strike clause in its extended contract. Its labor force is aware of this, and the automaker's recent success. Longtime insiders and commentators have seen this play out before. While some GM workers are not satisfied with the $5000 signing bonus, or that GM won't recoup lost cost-of-living allowances, others suggest that greedy and too-generous benefits increases are part of the reason the formerly crippled Detroit Three floundered for much of the past few decades. Of course, the UAW is not entirely at fault for Detroit's prior insolvency, and the contract issue is notoriously complex. But there is also plenty of vitriol by non-union workers for the UAW, and this is especially evident in the comments section of an Automotive News story, where one writer refers to the UAW as "blood sucking vampires," while another ridicules the notion of "money lost" from COLA and that a $58 an hour wage as less than generous. What do you think about the ongoing negotiations? Should the UAW be demanding better wages or be satisfied with what the automakers already provide? Tell us what you think in the comments section below. Source: Automotive News (Subscription required)
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4 comments
Jason Davis
Jason Davis

Don, We each have our own political opinions and ideas, but we try as best as possible to leave them out of automotive news. While the bailouts were contentious political events, and I'd not like to get into that, in the very least, tens of thousands of Americans kept their jobs at the height of the recession. That's worth noting, and is something to root for.

Jason Davis
Jason Davis

Well said, Al. Thanks for your feedback. But in your opinion, how do we get back being in "better shape?"

AL ALLEE
AL ALLEE

Not too many jobs out there where you can earn $50 an hour and still produce inferior products. I think the UAW is pushing too hard, no wonder many companies outsorce to overseas. Seems like most countries overseas, the employess have much better work ethics and are happy to have a job at even half the wages we pay overhere. Our country has gotten greedy, the worker wants more, the owner wants cheaper labor so they can make more. Our country was in much better shape when we didn't outsource jobs and we where paid on production and loyalty to the company you worked for. Where is the loyalty now? Employers think they can replace a worker at the drop of a hat, the employee will leap ship just as quick over a small indifferance

Don Gonsalves
Don Gonsalves

Dear Sirs: The bankruptcy at GM was a complete farce and in many peoples opinon,totally illegal. The bond holders and stockholders got royally screwed by basically the Government and their Democratic Buddies. One of my friends is a top bankruptcy expert and teaches this subject and he indicated to me he not buying any stocks due to what the government did with GM. The unions received a share of the new company far,far in excess of their claim while the stockholders and bond holders got far,far less than they were entitled to. The unions should be kissing the ground that they received what they did in the bankruptcy. I would ahve given them nothing, It is all a matter of time when they will go bankrupt again. People also do not realize that us the Taxpayers till own a large portion of GM and we are far,far underwater on our ownership. I blame this 100% on Obama and his (Liberal Union Loving )administration and I am an independent who voted for Obama in the last election. Never again.

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