Originally created 09/17/99

UAW, DaimlerChrysler reach tentative agreement

AUBURN HILLS, Mich. -- The United Auto Workers won annual 3 percent wage increases for four years in a tentative contract settlement reached Thursday with DaimlerChrysler, local union officials said.

The deal also includes a $1,350 signing bonus for all 75,000 union workers at DaimlerChrysler as well as support for their efforts to organize nonunion plants in the South, the officials said.

With the deal awaiting a ratification vote, the UAW now has a roadmap for bargainers as it turns its attention to General Motors Corp., with Ford Motor Co. on deck.

GM and Ford will likely be asked to match DaimlerChrysler's terms, which analysts said appeared likely to be approved by the UAW's membership.

"I think it's a good deal for the UAW -- the further enhancement of job guarantees and wage increase beyond inflation," said David Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan. "These are great jobs, and they continue to be great jobs."

GM spokesman Edd Snyder said lower-level talks with the UAW were taking place Thursday. The GM contract covers 222,000 workers, including those at Delphi Automotive, GM's former parts division.

Terms of the deal with DaimlerChrysler were not released by company or union spokemen when the agreement was announced Thursday morning at the end of a marathon bargaining session. Union officials in Indiana and New York disclosed the terms.

Roger Brown, president of Local 550 in Indianapolis, said he also had been told the deal includes a statement by DaimlerChrysler emphasizing its neutrality in union organizing. The union has said it would like to organize DaimlerChrysler's Mercedes-Benz sport utility factory in Alabama with 1,600 workers and Freightliner commercial truck plants in the Carolinas.

It is against federal labor rules for the issue to be part of the UAW's contract. But by stating its neutrality in the contract, DaimlerChrysler could stay on good terms with its largest union.

In addition, Brown said the deal includes an agreement not to spin off any parts of the company into independent businesses.

Such a clause might be aimed more at GM and Ford than DaimlerChrysler. GM has spun off its Delphi parts unit, and Ford would like to spin off its Visteon parts unit, a move the UAW opposes.

Brown and Scott Stanton, vice president of Local 624 in Syracuse, N.Y., also said the deal includes improvements in retiree benefits. Nearly half of the UAW's 407,000 active autoworkers at GM, Ford and DaimlerChrysler are eligible for retirement within five years.

"That part of it sounds good," said Brown, whose local represents 1,350 workers at a DaimlerChrysler foundry. "The rest of it we'll have to wait and see when we go to Detroit next week on Monday or Tuesday for an informational meeting."

Stanton said a ratification vote was scheduled for Sept. 25.

The deal came after over 40 hours of negotiations between the UAW and the company formed by the merger of Chrysler Corp. and Germany's Daimler-Benz AG. The UAW's negotiating team was headed by President Stephen P. Yokich after the death of vice president Jack Laskowski in August.

Workers interviewed leaving DaimlerChrysler's truck plant in Warren, Mich., on Thursday afternoon said they had heard little about the agreement because of the secretive nature of the negotiations. Some said they were pleased with what they had heard so far.

"We're doing well. We're working a lot of overtime. We're building a good product," said Matthew Lyons.

According to the company, the average assembly worker at DaimlerChrysler is 43 years old, has 16 years of experience and earns about $70,000 a year, thanks to overtime and profit sharing. The same worker gets 37 paid vacation days a year.

Union leaders have said that workers were entitled to a share of record automaker profits; the three companies combined earned more than $5.5 billion in the second quarter of 1999.

Wages are an issue at GM, which has sought to mend fences with the UAW after last summer's 54-day strike at two Flint parts factories. The strike virtually shut down the automaker's North American production.

According to union newsletters, the UAW has asked GM for higher wages, and has sought better overtime compensation with more money and extra time off. In recent years, automakers have held down employment by increasing overtime; the average GM hourly worker adds about 9 hours of overtime a week. Union newsletters also said GM has offered a lifetime employment guarantee for workers with more than 10 years of experience.

The largest issue between Ford and the union appears to be Ford's plans for Visteon and the unit's 23,500 UAW workers. The UAW fears a separate parts company would try to cut jobs and lower wages.

DaimlerChrysler shares fell Thursday, slipping 75 cents to $71.31 a share on the New York Stock Exchange, while GM rose $1.37 to $65.18 and Ford gained 18 cents to $49.93.


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