Chrysler workers yesterday won a contract that ties their pay boost to the company's profits. They are not thrilled.
"In my personal opinion it ain't gonna pass because there ain't no money in it," summed up Fred O'Brien, an official of the United Auto Workers local in Sterling Heights, Mich., after negotiators for Chrysler and the United Auto Workers announced a tentative agreement had been reached.
Although there is in fact more money for workers in the new contract, UAW President Douglas Fraser acknowledged it won't be easy winning members' approval. "I don't think it's going to be an easy ratification because it is a modest agreement," he said at a news conference. "So I suppose it's a question of convincing the membership. We couldn't have gotten anything better without a prolonged strike."
The proposed contract restores some of the concessions made by Chrysler workers in previous years to help save the company from bankruptcy, which left them about $2.60 an hour behind their counterparts at Ford and General Motors. The new agreement would reduce that gap to about $2 an hour, Fraser said.
The accord was reached just before dawn yesterday after a marathon 21-hour final session at the bargaining table. Hours earlier, several thousand Chrysler workers had walked off their jobs and taken up picket signs when a midnight strike deadline passed. Most later returned to their posts.
The union won a wage increase based on Chrysler profits as well as a resumption of cost-of-living allowances, tied to quarterly increases in the Consumer Price Index, he said. The economic part of the pact would run for just one year, as the union wanted. The noneconomic portions, including a small pension increase, would run for two years.
If the number three automaker makes between $20 million and $50 million in a quarter, $4 million of that would be shared with the workers. If profits run above $50 million, the workers' share would increase to $8 million.
The bonus could amount to between $80 and $160 per quarter for each worker, depending on profits, according to UAW officials, or it could amount to nothing if profits are below $20 million.
The average worker's hourly wage, now $9.07, would probably increase by 50 cents an hour under the cost of living provision alone, based on a 6 percent inflation rate, by Fraser's estimate.
The contract covers about 83,000 auto workers, 40,000 of them laid off.
The company failed in its attempt to get workers to share in the costs of health care, which, it argued, are out of control and add substantially to the cost of new cars to the consumer.
The automaker lost $3.27 billion between 1979 and 1981 but earned $256 million in the first half of 1982.
The bargaining had been a tense tightrope walk for both sides. The company, despite its recent return from the brink of bankruptcy, insisted that it could not afford any increase in its labor costs. If the union wanted more money in their paychecks, officials argued, there would have to be savings in other areas such as health or pension costs.
The agreement's impact on Chrysler's labor costs will be "very, very modest," according to Chrysler official Thomas Miner.
Chrysler Chairman Lee Iacoca said in an NBC interview yesterday that the contract is "fair" to both sides. "If we make some money, they will share in the profits. We think the market is going to turn around and we'll make a lot more money."
But Fred O'Brien, whose local represents workers at the Chrysler Sterling Stamping plant in Sterling Heights, Mich., said he doesn't believe the company officials when they say they can't afford to give the workers more.
He also blamed Congress and the administration for failure to enact tariffs to protect the U.S. auto industry from Japanese imports.