• Jun 19, 2007
Two years ago, the UAW gave some health care concessions to struggling GM and Ford in an effort to help the Detroit giants save billions of dollars and stay afloat. At the time, Chrysler was relatively well-off and so the union rejected a similar package for them. UAW President Ron Gettelfinger says that it's time to make up for that omission. Since 2005, the Chrysler Group went from a profit of $1.8 billion, to a loss of $618 million last year, and on to a $1.98 billion loss so far this year. Gettelfinger said a review of Chrysler's finances shows there's a problem that needs to be addressed, so talks are ongoing.
More after the jump.

[Source: Detroit Free Press]

The health care issue is a big one because U.S. automakers have more than $100 billion dedicated to health care for retired workers. If they can reach an agreement, the revised plan with Chrysler is likely to mimic the one with GM and Ford, where retirees would have a deductible placed on their policies and have higher co-pays on prescription drugs. Current workers would have to contribute part of future wage increases towards a trust fund for health needs, too.

Since DaimlerChrysler announced Cerberus would be taking a controlling stake in Chrysler, they are somewhat out of the deal. The negotiations are apparently in the Chrysler Group's hands even though Cerberus is likely to be involved. Cerberus is expected to demand more from the unions than Daimler would have. Some of this is a sort of pre-negotiation, getting ready for the big round of contract talks that will take place with the big three next month. Hopefully some type of compromise can be reached.

More coverage of the upcoming UAW labor talks can be found at BloggingStocks.


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    • 1 Second Ago
  • 12 Comments
      • 7 Years Ago
      My opinion of unions sucking now has changed. They suck less.
      • 7 Years Ago
      Wow, deductibles on on policies and higher co-pays... completely foreign concepts to the UAW. How are the remaining members ever going to cope.

      Whats next... getting rid of the job bank and having to work for your pay?
      • 7 Years Ago
      The problem of unions is that they don't care about the wellbeing of a company. And if a company has *any* spare money, unions immediately start demanding better compensation, more pay raises. Hence, a dangerous equilibrium is set where either a company breaks even from compensation, or falls under a mountain of debt when the prosperous times fall through.

      Those who blithely defend unions usually don't give an iota of thought about the companies themselves. They don't have unlimited resources. In some union-based companies here, they actually have to HIDE their assets, because as soon as the union catches wind of a surplus of money, they demand better pay under the threat of strikes.

      Unions have long since stopped caring about the wellbeing of employees. This isn't Oliver Twist, and the industrial revolution has ended long ago. They're in the business of swindling. cajoling, coercing. Not all unions are like this, but the UAW especially falls under this category.

      Gettelfinger should be afraid. After all the crap he put the Big 2.5 under, why would anyone want to put up w/ their crap? Job cuts and outsourcing to Mexico will continue if he thinks he could continue to get away with killing domestic auto manufacturers.
      • 7 Years Ago
      Just stop!

      What Chrysler (and America) needs is new management and no UAW.
      • 7 Years Ago
      How proactive of the UAW to hold each of the automakers' heads under water until they're almost daed, then lift them up and expect a return to prosperity.

      I'm sure Gettlefinger has already made a plan to re-instate job banks and torpedo the man once again the millisecond they make any money. UAW=socialism.
      • 7 Years Ago
      DOWN WITH THE UAW!! Free lynchings!
      • 7 Years Ago
      Seems that UAW workers earn (including benefits) about $30 more per hour than non-union auto workers.

      This disparity can't continue if domestic cars are expected to compete with the Toyota, Honda, and other car companies building vehicles in the U.S.

      Unions are parasites that eventually kill their hosts unless a strong dose of sanity intervenes to repel the unions.

      • 7 Years Ago
      So the last piece of plywood will be going up over the last factory window and the UAW will suddenly wonder, "wha' happin'?"
      • 7 Years Ago
      Unions - are they still relevant? Some argue no, while others argue yes. Back in the day - my grandfather worked in the GM Flint "sweatshops" pre-union. It was no picnic. He participated in the sit down strike because it was needed. However, 30 years later, he was oft quoted as saying that union members had long since forgotten where their paycheck came from. It came from the company - not the union.

      Most of my family is still in Flint and tied to GM - trust me, I heard the screams of "unfairness" when GM asked for a simple co-pay. My dad, retired white collar, sat there and said nothing because over the years - he's had his share of copays. He just couldn't believe the whining and sense of false entitlement.

      Unions are still needed to keep a check and balance to management. Absolute power in either direction corrupts absolutely. Management is supposed to make great business decisions. And for doing so they deserve every last penny in their big bonus. (Risk = Reward). Conversely - stupid decisions should not be rewarded. We've lost accountability in the system.

      The same accountability goes for the union -- stupid decisions (e.g., not going along with healthcare concessions for DaimlerChrysler) helped cause the name to change to Cerberus-Chrysler. Ooops. Now the rhetoric advances to a middle ground.

      It may be hard to fathom but nobody outside of southeast MI cares about the automotive industry. Nobody cared when the textile industry failed down south (unless you were personally affected - but you probably shop at costco, sams or walmart which helped send the business overseas but that's another discussion), nobody cared when the steel industry tanked (unless you had an OH or PA zip code).

      And the same is true here in southeastern michigan. I grew up in Flint and live in Detroit. It's sad when I look around at a lot of really smart people who can't seem to rally together, make the hard decisions, and work to get healthy again. It's not a quick fix situation -- it's a long term systemic solution that needs to be implemented. Or before long you will have only 1 US automotive company left. Which one? Not sure but the volume can only support one. Who is willing to step up and do what is right?