Chrysler’s UAW Workers To Ratify After Dramatic Split Vote.
Chrysler’s outgoing labor contract expired with a bang Sept. 14 — when Chrysler and Fiat CEO Sergio Marchionne blasted UAW President Bob King in a letter — and then wrapped up on an equally dramatic note Wednesday.
After a week of close voting on a tentative new labor contract, the UAW reported Wednesday that 54.8% of Chrysler’s total 26,000 hourly workers had voted in favor of the deal, but 55.6% of the 5,000 skilled-trades workers voted against it.
The rare divided vote sent the UAW’s leadership into a quandary. The union’s constitution requires a simple majority to ratify the pact, but it allows skilled-trades workers to reject their particular terms.
Chrysler had no interest in resuming bargaining, suggesting the entire contract could be sent into binding arbitration after nearly 14 weeks of negotiations.
But after two meetings, King said UAW leaders decided that Chrysler’s skilled-trades workers voted against the deal because of general economic issues.
“You want to protect the rights of the minority, but you can’t let the minority overrule the rights of the majority,” King said.
Chrysler’s deal, which was less lucrative than those at General Motors and Ford, passed with the closest vote. Chrysler, which reports third-quarter results Friday, had argued it is the financially weakest.
Carmakers, jobs makers
The UAW’s new contracts put the Detroit Three on the front lines of job creation at a time when U.S. unemployment is 9.1% and President Barack Obama is trying to convince Republicans to pass his jobs plan.
“The No. 1 priority, not just for our membership but for our communities and the United States … was to create more jobs, decent middle-class jobs, and I really feel like we strongly accomplished that,” UAW President Bob King told the Free Press in an interview Sunday.
The new contracts promise to add 20,000 jobs in all, although many depend on a further recovery of the U.S. economy and a higher demand for vehicles. Ford promises to add the most, 12,000, followed by General Motors, with more than 6,000, and then Chrysler, with 2,100.
UAW wins in this year’s contract talks include decisions by GM to reopen a plant in Spring Hill, Tenn., and Ford’s decision to make the next-generation Fusion in Flat Rock, in addition to Mexico. Chrysler plans to invest $1.3 billion across several plants.
Historically, the UAW has negotiated for better benefits and increases in base wages. This year, the UAW’s priority was to win more jobs, a wage increase for entry-level workers and a better profit-sharing plan for the 112,000 hourly autoworkers at GM, Ford and Chrysler.
“All things considered, it was a successful set of negotiations for both sides,” said Art Schwartz, former GM labor negotiator and president of Labor and Economics Associates. “And you can’t say that very often.”
GM, Ford and Chrysler were able to keep their long-term labor costs almost flat, Schwartz said, because there are no base wage increases for workers hired before 2007 and no cost-of-living increases.
“We did what was necessary to do to keep the companies, over the long term, viable,” King said. “I think it is kind of a major shift in how we approached negotiations and how we approached compensation.”
But King’s strategy came with huge risks that nearly backfired. At Chrysler, 55.6% of Chrysler’s approximately 5,000 skilled-trades workers voted against the contract while more than 60% of Chrysler’s production workers voted yes.
On Wednesday, the UAW held two meetings to resolve the split vote. If the skilled-trades workers had voted against the contract because of changes that specifically affect only their work, then the UAW would have tried to renegotiate a portion of the Chrysler agreement, King told reporters Wednesday.
“It was overwhelmingly clear that the issues were economic issues and not skilled-trades issues,” King said.
King said he doesn’t anticipate a major backlash from skilled-trades workers after the decision. “We did not go against what the skilled trades voted for,” King said. “We went with what the majority of members said — that they thought this agreement should be ratified.”
Ford’s contract also looked like it was in trouble when voting began, as workers at assembly plants in Wayne and Chicago. voted against the deal. “Very rocky,” is how King characterized the Ford voting process.
Ford’s contract will provide a before-tax signing bonus of $6,000, an early profit-sharing payment of about $3,700 and a $250 competitive award.
“The first people who voted kind of reacted emotionally with traditional expectations,” King said. “But the more we got out and talked to members, gave them all the facts, the more members were willing to vote in favor.”
King also won raises for entry-level workers.
At all three companies, entry-level workers hired after 2007 will see their wages increase to $19.28 by the end of the contract.
Entry-level workers for the Detroit Three are hired at between $14.65 and $16 per hour. Depending on the starting wage, the contracts provide a 20% to 30% wage increase.
The UAW’s grueling contract talks with the Detroit Three began on July 25 — nearly 14 weeks ago.
But King isn’t planning a vacation.
Instead, he will continue to monitor the UAW’s ongoing negotiations with the State of Michigan and plans to continue to try to organize automakers with plants in the South.
“I am headed over to India next week for a … meeting with unions from every part of the world,” King said. “One of the major topics there will be workers’ right to organize.” Source: Brent Snavely, Detroit Free Press.