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UAW Extends Chrysler, GM Contracts After Deadline

Thursday, 15 September 2011 10:33 AM EDT

Negotiations between General Motors Co., Chrysler Group LLC and the United Auto Workers union were expected to continue Thursday after bargainers failed to reach new deals before a Wednesday night deadline.

The union, which represents 111,000 workers at GM, Chrysler and Ford, agreed to extend the old contract and keep working, and there were signs that a GM deal was getting close.

"We are hopeful that an agreement can be reached soon," UAW leaders said in a statement posted early Thursday on the Internet for GM workers nationwide. "While we have made significant progress, we have not been able to secure a new agreement that we would recommend for ratification."

Chrysler, however, may be another story. Just before Wednesday's 11:59 p.m. deadline for the contracts to end, CEO Sergio Marchionne fired off an angry letter to the UAW president saying that he failed to show up to finalize a deal.

The UAW talks will determine wages and benefits for workers at the car companies, and they also set the bar for wages at auto parts companies, U.S. factories run by foreign automakers and other manufacturers, which employ hundreds of thousands more workers. The talks are the first since GM and Chrysler needed government aid to make it through bankruptcy protection in 2009.

GM negotiators stopped talking after midnight and said they would resume at 10 a.m. EDT Thursday. Chrysler and the union also talked until after midnight, but the company would not say if they stopped or when they would restart.

In the past, workers might have gone on strike if the UAW hadn't extended their contracts. But as part of their 2009 government bailouts, GM and Chrysler workers had to agree not to strike over wages.

The UAW extended its contract with Ford Motor Co. last week, as talks have progressed more slowly with that automaker.

Up until the deadline, the negotiations that began over the summer appeared to be proceeding without the acrimony that plagued them in the past. But then Marchionne sent the letter to UAW President Bob King.

"I know we are the smallest of the three automakers here in Detroit, but that does not make us less relevant," Marchionne said in the letter, which was obtained by The Associated Press.

Marchionne said only a few mainly economic issues separate the two sides, and he told King in the letter that he would travel out of the country for business and will return next week. He said he would agree to a weeklong extension of Chrysler workers' current contract. The UAW didn't set a new deadline to reach agreements.

King would not comment on the letter when reached by telephone early Thursday.

Marchionne said he and King met a week ago and agreed to finish work on the new contract before the deadline. He said not meeting the deadline hurts Chrysler's workers.

"You and I failed them today," he wrote. "We did not accomplish what leaders who have been tasked with the turning of a new page for this industry should have done."

King spent much of the day Thursday negotiating with GM, but it was unclear why he didn't appear at Chrysler's Auburn Hills, Mich., headquarters.

It's likely that any setback is temporary, though. The union has an interest in reaching a deal that's acceptable to both sides. A union-run trust that pays retiree health care bills owns more than 40 percent of Chrysler.

GM has taken the lead on the negotiations and its agreement may be used to set the pattern for the other two companies.

GM nearly ran out of cash and needed $49.5 billion from the government to survive, but it's been making billions in the last two years because its debt and costs were lowered in bankruptcy and its new products have been selling well. Chrysler has turned a small profit in the first half of the year.

Under terms of both companies' government bailouts, unresolved issues can be taken to binding arbitration, and the union's new contracts must keep the companies' labor costs competitive with Asian automakers such as Toyota Motor Corp. and Honda Motor Co.

The union has been seeking bigger profit-sharing checks instead of pay raises, higher pay for entry level workers who make $14 to $16 per hour, signing bonuses and guarantees of new jobs as auto sales recover. Ford and GM want to cut their labor costs to get them closer to Honda and Toyota, while Chrysler wants to hold its costs steady. Health care costs are also an issue.

Once the contract agreements are reached, workers will vote on them.

© Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Negotiations between General Motors Co., Chrysler Group LLC and the United Auto Workers union were expected to continue Thursday after bargainers failed to reach new deals before a Wednesday night deadline. The union, which represents 111,000 workers at GM, Chrysler and...
Thursday, 15 September 2011 10:33 AM
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