UAW contract with Chrysler in danger of being rejected

Right now, it's too close to call. After a six-hour strike two weeks ago, the United Auto Workers has put to vote a new contract with Chrysler LLC. The results have not been what would be called a resounding vote of confidence in the contract. As of October 25, estimates have 10 locals, representing about 17,700 workers, voting to approve the contract while eight locals, representing 16,000 workers, have voted against it.

The final major complex yet to be voted on is the Belvidere assembly and metal stamping plants in northern Illinois. Representing some 3,800 workers, the voting in Belvidere begins on October 26 and will wrap up on October 27. If the Belvidere workers vote down the agreement, there is a good chance that the number of workers at Chrysler facilities that have yet to cast their ballots will be enough to turn the tide. UAW Local 1268 president Tom Littlejohn has already publicly disapproved the contract and has told his members to vote against the deal.

The problems with the tentative deal appear to revolve around a couple of issues: first the hiring of new workers at a reduced pay scale, $14 per hour, as opposed to normal union wages of $28.75 per hour, and second, the lack of guarantees on production at Chrysler's assembly plants.

In addition, Belvidere also has issues with its 600 temporary workers who were hired under two-year contracts in 2006 to give the assembly plant the ability to start a third shift. These workers were brought in at a lower wage, and their health coverage did not kick in until eight months into the contract. They have been given no guarantees that they will retain their jobs after their initial contract is up and had filed a federal lawsuit against Chrysler, the International UAW and Local 1268 alleging breach of contract, which was recently thrown out by a U.S. judge. The Belvidere assembly plant is just coming off of a two-week shutdown caused by a lack of sales, during which time the temporary workers were not paid.

Chrysler recently announced that it might cut as many as five models from its vehicle lineup, meaning it would be difficult for the automaker to make guarantees on production. Chrysler's new owner, Cerberus Capital Management LP has made no bones about the fact that it bought the struggling automaker with the intent of turning the company around. To meet that goal, it will be necessary to trim low-selling models, close inefficient plants and restructure the way the automaker is operated.

Analysts predict that Chrysler will cease production of the poor-selling Jeep Compass, Chrysler Pacifica, Dodge Dakota and possibly the Dodge Durango while the Chrysler Sebring is expected to either receive a complete makeover or be cut from the manufacturing lineup, as well. The Jeep Compass is manufactured at the Belvidere assembly plant, which will vote on the contract in the next two days.

The next few days will be crucial to this temporary contract and also could affect the current negotiations, which are ongoing, with Ford Motor Company. If the contract is struck down, it will probably mean either a second strike against Chrysler or possibly a union lockout on Chrysler's end. Chrysler is working with approximately a 60-day stock of vehicles on its lots, and the recent idling of a half-dozen plants was aimed at reducing its inventory, especially of the slower-selling models. UAW workers have not rejected a national contract against Chrysler since 1982.

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