The United Auto Workers' Chrysler Council yesterday agreed to consider Chrysler Corp.'s request for a 21-month wage freeze but insisted on negotiating the terms of the concession.
Although the 250 plant-level union officials meeting in Romulus, Mich., voted overwhelming to reopen their current contract with Chrysler -- indicating a willingness to help the auto company once more -- they weren't prepared to rubber stamp the company's request for $600 million in wage concessions.
The UAW is concerned that an agreement with Chrysler could set a pattern for similar requests from Ford Motor Co. and other financially troubled firms in the auto sector, said UAW President Douglas A. Fraser.
"UAW members will do what is necessary to meet the requirements of the Loan Guarantee Act, but we must know what is truly necessary rather than merely a management goal, and we must be assured that others will do their fair share," the council said in a statement.
Union officials said the UAW wants to be sure that members of Chrysler management will make equivalent financial sacrifices and that the union will share in the benefits if Chrysler returns to profitability.
Over the weekend, Fraser said negotiations would not begin until after a Jan. 6 meeting between UAW officials and Treasury Secretary G. William Miller, chairman of the government's Chrysler loan board.
Fraser said the 69,000 active Chrysler UAW members probably would not vote on any new agreement until after Jan. 12, when Chrysler plants are to reopen after an extended holiday closing.
Chrysler officials said the UAW's qualified response yesterday was good enough for now, however, and prepared to ask the loan board to approve $400 million in new loan guarantees.
The wage proposal is part of some $1 billion in concessions by employes, suppliers and bank creditors intened to reduce Chrysler's operating costs by $1 billion next year and $5 billion by 1985. Chrysler must make the savings to persuade the loan board that it can survive.
The timing of Chrysler's new bid for vital government-backed loans remains uncertain.
Chrysler Vice President Wendell Larsen said that the company will submit its loan guarantee request today or tomorrow. There still is time to complete the review process before the Carter administration leaves office Jan. 20, he said, if the loan board gives conditional approval within the next week and Chrysler is able to line up agreements from the UAW, suppliers and creditors before Jan. 20.
The board cannot take final action on Chrysler's request until after negotiations with UAW have been successfully concluded, and Chrysler can't actually borrow the $400 million until final approval has been granted.
Treasury sources wouldn't predict whether the board will grant a preliminary, conditional approval before the UAW-Chrysler negotiations are completed. Although Miller is on vacation until Jan. 5, Deputy Treasury Secretary Robert Carswell can act in his absence.
Chrysler Chairman Lee A. Iacocca said the wage concessions are essential to Chrysler's survival and criticized the automatoc cost-of-living increases provided by the UAW contract.
That sounded like an ultimatum to some UAW members, who expressed their irritation with Iacocca. "You make this process extremely difficult for the union with such off-the-cuff remarks," Fraser and other UAW officials said in a letter to Iacocca.