UAW head says Chrysler needs concessions from union

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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