The United Auto Workers went on strike early today against Chrysler Corp., shutting down 50 plants in 15 states, idling 70,000 workers and threatening the No. 3 automaker with losses estimated at $50 million a week at a time of resurgent car sales.
In Toronto, the Canadian UAW, which bargains separately for 10,000 employes, also went on strike at six plants in Ontario after its contract expired at midnight.
The million-member UAW had been demanding "parity" with contracts at General Motors Corp. and Ford Motor Co., but Chrysler had said it could not tolerate the burden of higher labor costs. GM and Ford have higher wages and pension benefits, and profit-sharing and job-security provisions that Chrysler lacks.
"We deeply regret that the UAW is forced to strike the Chrysler Corp.," UAW President Owen Bieber announced at 12:10 this morning. "We believe every avenue has been explored . . . but the gulf between us is serious. We have some difficult areas as far as job security." An angry Chrysler Vice President Thomas W. Miner criticized the two unions, calling the strikes "absolutely unnecessary." He said the parties were nearing agreements when the unions walked out.
"This is a strike which never should have happened," Miner said. "It is tragic . . . . We were well on our way to an agreement on parity" with GM and Ford.
Chrysler and the American UAW were to resume talks today, but the negotiations are now complicated by strikes in two countries. Because U.S. and Canadian plants supply parts to each other, a strike of longer than a week in either country would shut all the plants in the other, the company said.
Neither side would identify the specific barriers to settlement, but Bieber said job guarantees sought by the UAW were the most difficult issue.
With the company earning record profits of $4 billion over 18 months, UAW members were seeking a generous contract with Chrysler because union members gave up more than $1.1 billion in wage and benefit concessions during the company's scrape with bankruptcy between 1979 and 1982.
Company officials, however, said they were willing to take a strike rather than accept what they saw as burdensome labor costs that would weaken the automaker's ability to compete with Japanese imports.
UAW officials, backed by a $672 million strike fund collected from union dues, said sentiment for a strike had been running high in many Chrysler plants.
The million-member union has struck in the United States only three times during the comparatively lean years of the last decade -- a nine-day Chrysler strike in 1973, 28 days at Ford in 1976 and a seven-day strike at GM last year.
"This is a real testing-place, not just for Chrysler-UAW, but for the auto industry, whether it will continue progress in labor-management relations . . . or new conflicts," said Arvid Jouppi, a Detroit industry analyst.
"The hot issue is not just money, but the perception of fairness" because of past union sacrifices, he said.
Chrysler chairman Lee Iacocca has become a central symbol in the fairness issue. Iacocca took an annual salary of $1 when his company received a $1.2 billion federal bailout in 1980.
But with the firm's dramatic recovery, he received $1.2 million in salary and bonuses last year, and pocketed an additional $5 million to $10 million by exercising his stock options, according to company data.
Many UAW members, who took pay and benefit cuts and gave up holiday and vacation time, are wearing buttons reading: "Lee Got His, We Want Ours."
Union members got a bit of good news yesterday when the union announced an agreement with Chrysler allowing employes to cash in an estimated $6,900 worth of company stock that each employe owns under terms of the federal government bailout.
The bailout created an employe stock-ownership plan, but until now the accumulated shares, currently averaging 183 shares per worker, could be cashed in only on retirement or death.
Wages for Chrysler assembly workers average $13.23 hourly, lagging behind GM and Ford by an average of 6 to 25 cents per hour. Chrysler workers' pension benefits are roughly 10 percent lower, and they do not have the profit-sharing plans of Ford and GM workers.
Chrysler's initial offer of $1,000 annual raises and lowered wages for new hires was dismissed by the union as inadequate.
Job security in the shrinking U.S. industry is also a major concern for the UAW. Chrysler has cut more than 60,000 jobs as it stepped up foreign production and automation since the early 1970s. The union wanted job-security guarantees to protect UAW workers from "outsourcing" -- the increasing use of outside sources to produce auto components -- at foreign plants and nonunion suppliers.
Chrysler produces only 30 percent of the parts for its domestic autos, and the union sought a pledge that the company would produce more components "in-house" if it could be done as efficiently.
GM and Ford last year refused union demands to limit outsourcing, but agreed to set up job-security "banks" totaling $1.3 billion over six years to provide wages and retraining to displaced workers.
Sources said the Chrysler negotiations included proposals for a similar but smaller job bank.
Union and company sources said the bargaining was complicated by several factors, including the 1985 split between UAW's American and Canadian wings that forced Chrysler for the first time to bargain simultaneously in Detroit and Toronto with separate unions pressing different demands.
Chrysler officials had said that if they agreed to match the 1984 GM-Ford contracts, which were signed after the seven-day GM strike last September, Chrysler would be saddled with higher labor costs than its American competitors.
Because Chrysler induced thousands of workers to take early retirement during its slump, it has a far higher ratio of retirees to workers than GM and Ford. Matching GM-Ford pension benefits would leave Chrysler with $1 to $2 per hour higher labor costs, company officials said.