Vol. 71/No. 42      November 12, 2007

The pact establishes a two-tier wage system, with many new workers hiring in at half the wages and with fewer benefits than the existing workforce. It also ends the company’s responsibility to provide health insurance to retirees.

The union membership at Chrysler approved the contract proposal by 56 percent of production workers and 51 percent of skilled trades. Workers at six large plants rejected the deal.

The Detroit News called the Chrysler contract “a second major step toward a dramatic transformation of the American auto industry.” Negotiations are now under way with Ford.

The union struck Chrysler for six hours in the final moments of negotiations. At GM unionists struck for 48 hours.

“The brief walkouts appear to have emerged as a way for both union leaders and company managers… to prove to their constituents that they got the best deal they could under the circumstances without an all-out war,” the New York Times commented October 11.

In the just-approved contract, new hires in a fuzzily defined category of “non-core” jobs will start at half the current starting wage.

“There are 3,000 people in this plant. Almost half the jobs are non-core—maintenance, material handling, underbody in the body shop, paint shop, inspection, people who drive the cars off the line,” Aaron Devers, 47, a worker at Sterling Heights Assembly in Michigan, told the Washington Post. “Non-core is an open window. We don’t know where it closes.”

Like GM, Chrysler won agreement to shift billions of dollars into a union-run trust fund called a voluntary employees’ beneficiary association (VEBA).

“Active workers will contribute to the cost of retiree health care through COLA (Cost of Living Adjustment) diversions,” the UAW announced in a press release describing the terms of the GM accord. It explains that “resources that would have been used for a general wage increase for active workers will instead be contributed to the VEBA.”

In exchange for these concessions, both companies made pledges—tied to profitability and sales—not to close certain plants or lay off sections of the workforce. These pledges were hailed by the UAW officials as a victory for the union.

Chrysler has cut its U.S. workforce from 60,000 in 2002 to 45,000 today through plant closures and layoffs.

Nationalist rhetoric was a central part of how the UAW tops tried to sell the concession contracts at both Chrysler and GM. The “protection of U.S. manufacturing jobs,” said a union newsletter, was “at the top of the union’s bargaining agenda.”
 
 
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Confronting the bosses’ assaults  
 
 
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