United Auto Workers union leaders said yesterday that their Chrysler Corp. rank-and-file members have approved a $622 million wage and benefit concession package designed to help the nation's No. 3 automaker stay in business.
The vote means the company's organized workers will take an average $46-a-week pay cut and will forego cost-of-living allowances (COLA) and other benefits, such as an annual 3 percent wage bonus for production increases, to help Chrysler qualify for the $400 million in federal loan guarantees it says it needs to avoid bankruptcy.
The vote also marked the third time in 16 months that Chrysler-UAW workers approved wage-benefit givebacks to the company, amounting to a total of $1.068 billion by union estimates.
Chrysler-UAW members agreed to the two previous scaled-down contracts -- in November 1979 and February 1980 -- by average margins of 77.2 percent and 82.3 percent, respectively.
UAW leaders expected yesterday's vote to go over by a much smaller margin, and they were right. An estimated 58.8 percent of the 45,801 UAW members voting in four job classifications -- hourly production and maintenance, salaried office and clerical, salaried engineering and hourly workers in parts depots -- said "yes" to the latest concessions.
"It was tougher to get the concession vote this time around because the agreement called for the elimination of the cost-of-living allowance," said Marc Stepp, UAW vice president and director of the union's Chrysler Department.
"The workers told us in 1979 to take all of the paid personal holidays if we needed them and to take other benefits but to leave the COLA alone," Stepp said in a weekend interview before the conclusion of the vote.
He added: "After COLA, these members felt that the only thing they would have left is their jobs. But that's what we were down to at Chrysler. So we had to tell them to keep the COLA and lost their jobs or keep their jobs and lose the COLA."
That argument had little effect on disgruntled UAW members at the modestly profitable Chrysler Tank Plant in Warren, Mich., where workers rejected the concession contract on an 837-to-107 vote.
Frank Kulik, a UAW committee-man at the tank division, said his members were not acting out of selfishness. Instead, he said they were expressing dissatisfaction with a "government-dictated wage concession" designed to "rob us of our financial position in society."
However, Stepp and other UAW leaders dismissed that argument, saying that the tank division employes, who enjoyed full union wages when their unit was not profitable, should have been willing to sacrifice at this time.
"The well-being of hundreds of thousands of Americans depends" on the ability of the Chrysler Corp. to survive, Stepp said.