DETROIT — Chrysler and the UAW formally kicked off contract discussions Monday with a respectful attitude toward the contribution made by U.S. taxpayers who funded the automaker’s bankruptcy restructuring in 2009.
The current four-year labor contract expires Sept. 14.
Chrysler, which
is now controlled by Fiat, has repaid the loans it received from the U.S. and Canadian governments.
“We are really excited about the Chrysler-Fiat relationship,” UAW President Bob King said at the company’s headquarters in Auburn Hills, Mich. “I think the negotiations are different because we collectively feel we have a huge responsibility to the American public to thank them for their support.”
King spoke to the media after he and UAW Vice President General Holiefield shook hands with Chrysler executives.
UAW and Chrysler leaders wore the same maroon shirts in a symbolic gesture to show their mutual respect.
“We have gone through a lot together, and we are going to continue to forge ahead,” said Al Iacobelli, Chrysler’s vice president of employee relations.
There are several key differences between contract discussions this year and the last time a national contract was negotiated in 2007. This year, for the first time, the UAW is bound by an agreement that it reached with Chrysler and General Motors in 2009 that requires the two sides to enter into binding arbitration if they reach an impasse.
King said Chrysler and the UAW have formed a committee to set up the ground rules for arbitration, even though he said that is a last resort.
“If arbitration happens … then I would say we haven’t done our job,” King said.
In the past four years, Chrysler has been able to cut its hourly labor costs per worker from nearly $76 to $49 through buyouts. That has been done by shifting the management of retiree health care to a UAW-managed trust, by hiring about 2,800 entry-level workers and by freezing benefits such as cost-of-living adjustments.
About 12.3 percent of Chrysler’s 23,000 U.S. hourly workers were hired at a lower wage that starts at $14.89, or about half the wage of traditional workers.
Iacobelli said Chrysler’s top priority this year is to make sure the automaker and the UAW don’t slip back into a contract agreement that allows its costs to escalate.
“It wasn’t too long ago that we emerged from a very painful restructuring,” Iacobelli said. “Unfortunately, we have a history in this industry of not getting it right … . As a result, it has cost us thousands and thousands of jobs.”
King said he understands the need each of the Detroit Three to be able to compete with each other and with Asian automakers’ U.S. plants. Still, he said UAW members should not be forced to make additional sacrifices this year since all three automakers have become profitable.
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