Friday, October 19, 2007

Chrysler Contract Highlights

Coming into work this morning, I heard on the radio that Chrysler's St. Louis Plant "overwhelmingly" voted down the national contract by an 81% vote while the Kenosha Wisconsin plant approved it with an 82% margin. Our voting will take place tomorrow afternoon, and it will be interesting to say the least.

I received a copy of the summary of the contract (salaried summary and hourly summary) a couple of days ago, and from what I read, I wasn't impressed. In fact, I was alarmed. Of course there are numerous items that I read that didn't strike me as being favorable to the Union Membership, and there just didn't seem to be much that the Company was giving up.

One of the items that I noticed was a change in COLA. COLA is very important to me - no one likes to see their paycheck lose it's purchasing power. The new formulation could actually reduce what I take home.

The next item I noticed is the wording of job security concerning life cycles of products. Who determines life-cycles of products? Management does. While there is a moratorium on idling or closing plants, that doesn't mean that the plants cannot be cut back to a minimal production and staffing level. While this can happen underneath the auspices of a revised business climate, and the company is certainly entitled to take these actions, what bothers me is that the Union Leadership is touting an increased job security level for its members through this agreement. Last, the summary does not state any commitments by Chrysler to the plants beyond the terms of agreement, which is true job security.

And it goes on...

I understand that one of the Union's chief negotiators is speaking out and wanting a return to the bargaining table, and a website ( has posted his letter to the rest of the Union leaders advocating this action. Additionally, the website has posted the following objections to the proposed contract agreement:

UAW-Chrysler 2007 Lowlights

Rather than compare what we got to what we had, the UAW-Chrysler “NEWSGRAM” makes bread crumbs look like meat and potatoes by comparing what bargainers gave away to what the company wished to take away.

“Chrysler had an agenda that was nothing but cutbacks.”

“Your bargaining team successfully resisted the company’s demand to cut your pay.”

Ignore the sales pitch and study the numbers. Not only will .10 cents per quarter be deducted from COLA raises but an additional $1.01 will also be deducted. As a result “your bargaining team successfully” cut $2.51 per hour over the life of the agreement. That is $100 per 40 hour week.

Lump sum payments are here today, gone tomorrow. Raises and cost of living adjustments are here today, and grow tomorrow. COLA and annual raises compound quarterly and pay dividends, week after week after week. COLA diversions compound deductions, month after month after month.

On top of that, new hires will start at $14 per hour, a standard well below the nonunion manufacturing average of $19.62 as cited by the UAW Research Department []. Wages will be frozen for the next four years, but in 2011 everyone will be degraded.

Are you “core” or “non-core”? First class or second class? And what is the value of seniority if you can never transfer to a better job? The parties agreed “to consolidate classifications” [pg 121].

There will be two classifications among “core” workers: Team Member or Team Leader. “Every employee is a Team Member; there are no specialty job classifications.” [pgs 227-228]

Core workers will not be allowed to transfer to the better “non-core” jobs. If a worker is currently in a non-core job, they will be “red circled”. Management will have a powerful motivation to remove you and replace you with someone who will earn half as much.

“The parties have identified Non-Core product and process work totaling 8,000 jobs represented by the UAW that will be retained through a moratorium on outsourcing” [pg 159]. BUT in an “UNPUBLISHED LETTER” the parties agree “to meet and establish initial guidelines and parameters within 120 days of ratification that will be used to determine the application of the MOU” [pg 308]

In other words, we haven’t heard the last word. There’s more to come, including, “The parties will also determine appropriate application of core/non-core provisions to future Temporary Part Time (TPT) employees” [pg 308]. The future is increasingly temporary [see pg143].

Three facilities— Toledo Machining, Detroit Axle, and Marysville Axle — will be designated entirely non-core [pgs 154-155]. Nineteen Parts depots will be designated entirely non-core [pg 168]. All transport workers will be designated non-core [pg 151].

Despite the job security brouhaha in the “Newsgram”, all insourcing is “dependent upon a favorable business case” [pgs 159-160]. And despite the so called moratorium on outsourcing, the parties have “agreed to exit” janitorial, cardboard disposal, trash handling, ground, lawn care, snow removal, line sweepers, booth cleaning, machine cleaning, and chip handlers [pg 302]. But that’s just the beginning.

Skilled trades will be systematically reduced [pgs. 274-280]. “...any given classification may perform work normally belonging to another classification” [pg 275]

Forty-eight skilled classifications “will be incorporated into the Work Group Model based upon plant needs” [pgs 276-277].

“Implementation of the basic trade classifications into the Natural Work Groups is expected to occur no later than the end of the 2nd quarter, 2008” [pg 279].

Retirees were not spared. The VEBA is less than 50% funded. “In reality, the $11 billion you paid to get the health-benefit liabilities off your books will soon look outrageously cheap” []. But in reality, it’s $7.1 billion cash for $19 billion in liability. What’s a “debenture” to a private equity company? They can print stock at Kinkos. A seventeen year old prom queen wouldn’t buy that line from a quarterback in a tux.

According to Newsgram: “The company will pay an additional $1.5 billion to pay for retiree benefits from now until 2010 when the VEBA becomes operational.”

The company was already legally obligated to pay for retiree health care as a result of previous contracts. There was nothing “additional” about it.

If $1.5 billion is needed to cover retiree health care for the next two years, $8.8 billion will not last more than twelve years. Hence, the repeated phrases, “provide benefits at modified levels,” and “trustees will have the authority to make benefit adjustments” predict further rollbacks.

Stand your ground. There’s nowhere to run.

Labor Donated by Soldiers of Solidarity [ ]

During our brief strike, many of us mused on the picket line what was going on at the bargaining table. After finding ourselves back at work the next day, it seemed that the strike was only for show. A comment in this article seemed to echo this sentiment:

The short strikes may have been more for show than an actual inability of the parties to agree on a new labor contract said David Cole, chairman of Center for Automotive Research in Ann Arbor, Mich.

“It’s hard to know what the real rationale was for the strikes, but it seems they were something designed to show that what the automakers and the union had agreed on was really important,” Cole said. “Now they can go to their members and say we have made concessions on wages and on health care costs, but we have fought for an agreement on job security.”

Did the Union negotiate a good agreement? I personally don't think so. Did they negotiate in good faith to the Membership? I think they did, but I also think that they gave up too much in wages and COLA for the sake of VEBA.

Whether or not we will ratify this agreement will depend on the voting this week, or if it's back to the table. In either case, it will be interesting.

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