With Ford contract ratified, UAW turns to Chrysler

Oct 20, 2011

Chrysler union workers vote this week on a tentative new contract. 

Ford workers approved their contract on Wednesday, 63-percent in favor to 37-percent against. 

But the contract was narrowly rejected at the Michigan Assembly plant in Wayne.  Bob King is President of the union. 

"I don’t feel bad or in any way negative towards those workers because they voted against it," says King.  "I think they expressed honest, legitimate concerns.   I have the same concerns.   I don’t like a system where people on the same assembly line are making a different rate of pay."

The new contracts keep the two-tier wage system in place, where entry level workers get about half the pay as senior level workers. 

Some workers had also hoped for a restoration of annual cost-of-living pay raises, which the union gave up in 2007.

But King says that's unrealistic, given current economic conditions.

"You can’t do cost of living in GM, Ford, and Chrysler agreements and not have it in Toyota and Honda, because it would just make our products uncompetitive," says King.  "So you have to organize the industry to win those kind of benefits back."

King hopes to unionize a U.S. factory operated by a foreign company, like Volkswagon.

Chrysler workers face a different dilemma than Ford workers in deciding whether to accept the new contract.

Ford was the only Detroit car company not to accept federal bailout loans.  That means the company could have faced a strike if workers rejected the tentative contract.

But if Chrysler workers reject their tentative deal, the contract will be decided by binding arbitration. 

That's a big unknown, for both the company and the union. 

Some experts speculate binding arbitration would go harder on the union than the company, because language drafted during Chrysler's bankruptcy stipulates that the arbitrator cannot impose any terms that would put Chrysler at a disadvantage with its competitors.

Chrysler is also much less profitable than Ford.  Ford workers get a $6,000 signing bonus as part of their deal.  Chrysler workers would get $1,750.