Chrysler Corp. and the United Auto Workers have agreed on a profit-sharing plan designed to help UAW members regain some of the pay they sacrificed to keep the company alive.
Marc Stepp, UAW vice president in charge of the union's Chrysler division, announced the plan in Detroit yesterday, a day after the company reported its first profitable quarter in more than two years.
Chrysler, the nation's No. 3 automaker, earned $11.6 million in the second quarter of this year, its first profitable showing since December 1978, when it easrned $43.2 million. Economists are predicting that the company will show losses again by the end of the curent quarter, however.
The profit-sharing plan presented yesterday is based on a UAW/-Chrysler agreement in principle reached last January. The agreement was a key element in Chrysler's successful bid to win $400 million in federal loan guarantees, money it said it needed to stay in business. UAW workers gave up $622 million in wages and benefits to help the company qualify for that loan.
Under the terms of the profit sharings plan, Chrysler's UAW workers will be eilgible for the following benefits:
A $50 payment, effective Oct. 16.
Fifteen percent of 1982 profits that are in excess of 10 percent of the company's net worth. Under this provision, workers may choose to take their individual shares in the form of credit toward the purchase of a U.S. or a Canadian-made Chrysler vehicle at the rate of $1.50 for each $1 share of entitlement.
The right to receive profit shares in addition to stock earned under the company's employe stock ownership plan (ESOP).
Details of the profit-sharing plan were worked out last week, according to UAW spokesman Jerry Dale, who said the particulars were not announced until the union leadership had a chance to explain them to affected members. The union also worked out a companion agreement, under which the corporation will make available to its UAW workers more than 3,000 "purchase certificates" for Chrysler products. The certificates, four of which will be worth the full purchase price of a Chrysler Imperial, will be distributed through a drawing, Dale said.
The UAW has advocated profit-sharing since 1955, but none of the nation's Big Three automakers bought the idea until Chrysler found itself skidding on the edge of bankruptcy in 1979. Since then, General Motors and the Ford Mortor Co. have expressed interest in establishing profit-sharing plans in return for the kinds of wage and benefit concessions -- a total of $1.068 billion -- the UAW gave Chrysler.
But union officials, speaking privately, yesterday downplayed any suggestion that they might be willing to make a similar deal with GM and Ford.
"The point is that Chrysler was in trouble and needed a way out," one union official said, adding that Chrysler's financial circumstances are and were "substantially different" from those at GM, the largest automaker, and Ford, No. 2.
"Our bargaining position next year will depend on the factual circumstances in the market. We hope that the market would have picked up by 1982," the UAW official said.
UAW contracts with the Big Three automakers expire next year.