Chrysler Corp. directors voted yesterday to seat United Auto Workers President Owen Bieber on the company's 21-member board.
Bieber is the second UAW president to hold a Chrysler board seat, and the second union leader ever to occupy that kind of position at a major U.S. corporation.
Bieber's election thus marks a continuation of a four-year-old domestic experiment that some observers say could lead to a permanent role for organized labor in some high-level corporate councils.
The test started with the near-collapse of Chrysler in 1979-1980, when the company received nearly $1.1 billion in wage and other concessions from the UAW. Then-UAW president Douglas A. Fraser, with the necessary approval of Chrysler Chairman Lee A. Iacocca, was appointed to the company's board of directors in 1980 in return for the union's sacrifice.
Fraser, who resigned from the board June 7 nearly one year after leaving the UAW presidency, called his place on the board a "union seat." Iacocca disagreed with that characterization, saying that Fraser was appointed solely on the basis of individual merit.
The union and the company held fast to those perceptions yesterday.
"The significance" of the directors' vote yesterday "is that it upholds the principle established at Chrysler in 1980 that workers ought to have a voice at the highest levels of the corporation," Bieber said.
"I assume the board seat with the understanding that to speak on behalf of Chrysler workers is also to speak in the best interests of the corporation," Bieber said.
"It's obviously an institutionalized union seat that Chrysler is treating as an individual seat," said Alan Altshuler, a major contributor to the Massachusetts Institute of Technology's recently released report on the future of the automobile industry. This gives Chrysler the option of "changing its mind" about union representation on the corporate board, Altshuler said.
Gary M. Glaser, auto industry analyst for New York-based Sanford C. Bernstein & Co., agreed that Bieber's election means Chrysler "has institutionalized a union seat on its board."
"Bieber is not close to Iacocca in the way that Fraser was. So I think Chrysler is saying that the union's president probably should have a seat on the board, particularly because the union's members own so much stock in the company," Glaser said.
UAW-represented Chrysler workers own 15.3 million shares, or 12.3 percent of Chrysler stock, making them the single largest group of Chrysler shareholders.
But that does not mean that the UAW has automatic entitlement to a board seat, some Chrysler officials said privately yesterday. Those officials insisted that Bieber's election was based on an extensive review of his qualifications and, as one said, Bieber's apparent commitment to improving the competitive position of the domestic auto industry.
Bieber's recent handling of UAW contract negotiations with General Motors Corp. -- a tricky affair that pitted volatile rank-and-file demands for pay increases against seemingly contradictory demands for job security -- "showed that Bieber is a pretty good operator, a statesman," one Chrysler official said.
The UAW-GM negotiators reached a tentative settlement after a six-day strike that shut 17 GM plants. A longer and more costly walkout had been predicted. UAW rank-and-file members are expected to ratify the contract by Oct. 14.
Iacocca said in prepared comments yesterday that Bieber's appointment was based on the union leader's "extensive discussions with various members of the board, including myself.
"We were all impressed with his personal integrity and grasp of the problems facing the auto industry," Iacocca said.
In its contract negotiations with GM and Ford, the UAW has asked for a seat on their boards. Industry sources say that GM tabled the request. A Ford spokesman said yesterday that his company is considering the matter. GM and Ford officials declined comment on Bieber's appointment at Chrysler, where the union is pushing for early negotiations to replace its current contract.
Bieber said yesterday that he will not participate in board discussions about collective bargaining issues.