The 2007 UAW Chrysler National Negotiating Committee meets with UAW President Ron Gettelfinger and UAW Vice President General Holiefield, center.
Contract Protects UAW Jobs
After months of tough bargaining and an extraordinarily disciplined six hour strike, UAW workers at Chrysler brought home a new contract with unprecedented product and investment commitments.
With the protection of U.S. manufacturing jobs at the top of the union’s bargaining agenda, UAW negotiators insisted on — and won — solid pledges from Chrysler to build specific vehicles and components in specific plants.
UAW bargainers were successful in turning back a demand by the company to divest all MOPAR Parts Distribution Centers (PDCs) and to close Chrysler Transportation. Cleveland PDC, which was scheduled to close, will stay open.
“Chrysler workers joined the fight for U.S. jobs, and made significant gains on behalf of our members and our communities,” said UAW President Ron Gettelfinger.
The tentative agreement, reached on the afternoon of Oct. 10, also delivers economic gains for UAW active and retired members. The agreement will provide more than $10,000 in economic gains for a typical UAW member over the life of the four-year agreement, including a $3,000 signing bonus, two 3 percent lump sums and a 4 percent lump sum.
Health care protected for actives, retirees: Active workers will see their comprehensive health care coverage continue. Chrysler will pay $10.3 billion to secure future health benefits for retirees, including $8.8 billion to fund a Voluntary Employee Beneficiary Association (VEBA). The fund, to be independently administered, can only be used to pay retiree health benefits, and will remain solvent for decades regardless of the financial condition of Chrysler.
The company will pay an additional $1.5 billion to pay for retiree benefits from now until 2010, when the VEBA becomes operational.
Pension boost for current and future retirees: The proposed contract will also deliver benefits to current and future UAW Chrysler retirees, with four lump-sum payments for current retirees, and a raise in basic benefit rates, the 30-and-out- supplement, and temporary and interim benefits for future retirees.
“Chrysler had an agenda that was nothing but cutbacks, but our membership turned the company around,” said UAW Vice President General Holiefield, who directs the union's Chrysler Department. “We saved plants, we saved parts distribution centers and we saved jobs.”
Members make sacrifices: The new agreement also requires contributions from active UAW members to benefit retirees and an adjustment in wage schedules to encourage new hiring at Chrysler. Resources that would have gone to a general wage increase for active workers will instead be used to contribute to the VEBA to fund retiree health care benefits, and Chrysler will have the right to hire entry-level workers at a lower wage rate for certain “non-core” operations.
“This is an agreement that deals with the current reality of our industry,” said Holiefield. “We set the stage to encourage future growth.”