UAW calls Chrysler meeting as bargaining resumes

DETROIT/MONTREAL Fri Oct 7, 2011 10:47pm EDT

Sergio Marchionne, Chrysler Group LLC. Chief Executive Officer, speaks during a news conference at the Chrysler Casting Plant in Etobicoke May 30, 2011.  REUTERS/Mike Cassese

Sergio Marchionne, Chrysler Group LLC. Chief Executive Officer, speaks during a news conference at the Chrysler Casting Plant in Etobicoke May 30, 2011.

Credit: Reuters/Mike Cassese

DETROIT/MONTREAL (Reuters) - The United Auto Workers union has summoned local officials representing some 26,000 Chrysler Group LLC workers to Detroit as contract talks with the No. 3 U.S. automaker near a turning point.

Chrysler Chief Executive Sergio Marchionne said on Friday that he expected bargaining on a new four-year deal on wages and benefits to intensify over the next three to four days.

Separately, the UAW summoned union presidents representing local bargaining units to Detroit for a Monday update on the contract talks, a person briefed on the plan said.

Typically the UAW leadership only summons the bargaining council representing to meet when they have a tentative contract to present to local officials.

But the union's talks with Chrysler have been the most strained of its contract talks with any of the Detroit automakers in the current round of negotiations, and there was no indication of new progress on Friday.

That left open the possibility that UAW President Bob King may want to brief local union presidents on the sticking points in talks, and the risk that the negotiations are deadlocked and head to arbitration, the person said.

Chrysler had no comment. The UAW could not be reached to comment.

UAW Vice President General Holiefield, who is leading the negotiations with Chrysler, thanked Chrysler workers for their patience in an online posting earlier on Friday.

Talks between the two sides have been underway since July but stalled last month over Chrysler's push to seek a more concessionary labor deal than the union was willing to give its larger rivals, General Motors Co and Ford Motor Co.

"Progress has been made. However, key issues are still being discussed," Holiefield said in a memo.

CHALLENGED PRECEDENT

Separately, Marchionne, speaking to the Italian Chamber of Commerce in Montreal, said he expected Chrysler to reach a deal with the union and avoid arbitration, but he challenged the precedent set in contract agreements with General Motors Co and Ford Motor Co.

Earlier this week, the UAW and Ford reached a tentative four-year contract that allows veteran workers to get at least $16,000 in bonuses. Last week, UAW workers at GM ratified a slightly less generous labor contract.

Chrysler, the smallest of the Detroit automakers, is under more pressure to hold the line on costs because its finances are weaker.

"Some of the deals that we've seen being signed between Ford and GM (with the UAW) are probably, given Chrysler's own predicament... overly generous," Marchionne said on Friday.

Chrysler, which nearly collapsed two years ago, is still executing its turnaround and trying to change public perceptions of its vehicle quality.

The company emerged from bankruptcy with a debt load that included $7.6 billion in government loans. In May, Chrysler repaid those loans through a refinancing that helped reduce its interest payments.

As a result, Chrysler is eager to hold down its fixed costs beyond the 2015 expiration of the deal being negotiated, people involved in the talks have said.

Chrysler's contract with the UAW expired on September 14, but both sides extended the deal to October 19.

As part of Chrysler's bankruptcy restructuring in 2009, workers gave up the right to strike and agreed to binding arbitration if a deal could not be reached.

"The intent is to try and get to a deal without going to arbitration," Marchionne said. "I think we're approaching this with the best of intents."

Marchionne, who is also the CEO of Chrysler's majority owner, Fiat SpA, has sparred with UAW leadership. Last month, he sent a scolding two-page memo to the UAW's King for missing a key negotiating meeting.

(Reporting by Bernie Woodall and Deepa Seetharaman in Detroit, Allison Martell in Montreal, Writing by Kevin Krolicki; Editing by Daniel Magnowski)

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