UAW sets strike deadline of tomorrow at Chrysler

Auto firm reportedly plans white-collar cuts

October 09, 2007|By Detroit Free Press

DETROIT -- Chrysler LLC, deep into labor contract negotiations with the United Auto Workers, also is making changes to its non-union work force - cutting hundreds of salaried and contract jobs.

The automaker announced plans in February to eliminate 13,000 jobs over three years, including 2,000 salaried jobs. Now it intends to reduce even more white-collar positions by cutting the non-union salaried work force by 5 percent and cutting the contract work force at its Auburn Hills headquarters by 37 percent, people briefed on the plan said. They asked not to be named because of the subject's sensitivity.

The move comes as the labor organization has given Chrysler a deadline of 11 a.m. tomorrow to reach a new labor agreement or face a nationwide strike, according to a memo sent yesterday by UAW President Ron Gettelfinger and Vice President General Holiefield to local leaders.

Although Gettelfinger told local leaders that Chrysler had "thus far failed to make an offer that adequately addresses the needs of our membership," several industry observers said the new deadline could indicate the two sides are near a deal.

"It is meant to put the negotiations into their endgame," said Harley S. Shaiken, a labor expert from the University of California at Berkeley.

"A deadline like that indicates two things that are a bit contradictory: first that a deal is near. Second that there is some trouble closing it."

Chrysler, which is undergoing historic evolution as the first privately held major American automaker in more than 50 years, is racing to make changes at all levels - from the chief executive's suite to the assembly line.

In August, Cerberus Capital Management acquired majority control of Chrysler, putting Robert L. Nardelli in control as chief executive officer and keeping former CEO Thomas W. LaSorda on as president and vice chairman.

Last week, minority owner Daimler AG confirmed that LaSorda, who is leading the UAW negotiations for Chrysler, was paid a bonus related to the sale of Chrysler to Cerberus. A German union leader characterized the bonus as "unreasonably high."

Before the ownership change, Chrysler, which lost $2 billion in the first three months of the year, implemented a turnaround plan that shed about 1,000 white-collar jobs this year and another 1,000 next year.

Under the new plan, an additional 5 percent reduction of non-union salaried workers could mean the loss of 535 white-collar jobs.

The automaker also has 3,000 contract workers in Auburn Hills. A 37 percent reduction could mean the loss of 1,110 jobs.

Chrysler declined to comment for this article.

In August, LaSorda seemed to indicate that more cuts were on the horizon when he refused to rule out that the turnaround plan would go deeper than initially announced, noting that the economy was hitting the auto business hard.

The automaker's U.S. sales are down 3 percent this year compared with 2006.

Shaiken said it was not surprising that Chrysler would be making cuts to its white-collar ranks while negotiating a UAW contract.

"White-collar folks at the Detroit automakers are in the unfortunate position of any time a company wants to make a point to the union, they demonstrate it on the white-collar folks, either to set the example or to show that they mean business or both," Shaiken said.

Leaders of UAW locals at Chrysler plants were prepared for a strike Sept. 14, when the 2003 contract was set to expire.

But work continued around the nation under an indefinite contract extension at Chrysler and Ford Motor Co. while the UAW worked to get a deal with General Motors Corp.

Talks with GM went nearly two weeks past the Sept. 14 deadline and included a two-day strike at GM facilities before a tentative agreement was reached Sept. 26.

Talks between the UAW and Chrysler intensified during the weekend. Negotiators met late into the evening Sunday and were expected to go late last night, people familiar with the talks said.

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