UAW Gives Chrysler Tuesday Deadline

By Brendan Moore

10.08.2007

UPDATE 1:03 PM Eastern: Since publication, various news agencies have reported the deadline set by the UAW regarding a new agreement with Chrysler has now been pushed back to 11 AM EDT Wednesday.

Chrysler has received notice from the UAW that the contract extension it gave Chrysler previously will expire tomorrow on Tuesday. It is possible that the UAW could go on strike upon expiration of the agreement. The UAW is obviously not afraid of using the strike option since it just struck GM last month for a short two-day strike when the GM-UAW labor agreement talks faltered.

Neither Chrysler nor UAW would comment regarding the ongoing talks.

It was widely assumed that the agreement reached between GM and the UAW last month would serve as a blueprint for agreement talks the UAW is having with Chrysler and Ford, but both Ford and Chrysler have made public statements saying that an exact duplication of the GM agreement will not serve their respective companies’ business needs.

And unlike GM, the new privately-owned Chrysler LLC has not been coy about making noises about moving their production overseas if they can not reach a satisfactory agreement with the UAW. Chrysler says they have an approximately $30 an hour cost differential when compared to the Japanese automakers producing cars in the U.S., and that if that difference isn’t reduced to something much smaller with the new agreement, then all bets are off in terms of where Chrysler is going to produce their future vehicles. Chrysler currently has a 12% market share in the United States, behind GM, Toyota, and Ford.

The UAW, on the other hand, wants the same type of production guarantees in the U.S. from Chrysler that it got from GM, and the new management at Chrysler is not very interested in extending such guarantees to the UAW, since they themselves are not really sure what they’re going to be selling two or three years from now, never mind where it will be screwed together.

I think Chrysler and the UAW will get an agreement hammered out in the next week, but there may be some big differences in the final draft compared to the one that was done with GM.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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2 Comments

  1. What, another 2 day strike? Big deal! It’s all just posturing by the UAW. They know the new owners of Chrysler are not going to put up with their demands, so it’s either compromise or wave goodbye to those production jobs.

  2. Cerberus must be thinking “what have we gotten ourselves into?” right about now.

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