Chrysler-UAW talks resume under strike threat

By Kevin Krolicki and Poornima Gupta

DETROIT (Reuters) - The United Auto Workers and Chrysler returned to the bargaining table on Tuesday as the union threatened to strike the struggling U.S. automaker if a new deal on wages and benefits is not reached.

Also, Chrysler plans to cut about 1,500 additional white-collar jobs than initially planned, a person briefed on the plan said on Tuesday.

That would nearly double the nonunion job cuts that Chrysler announced in February as part of a restructuring plan aimed at returning the company to profitability by 2009.

Chrysler declined to comment on the job cuts.

The UAW has warned it will go out on strike at 11 a.m. Wednesday if the two sides fail to agree on a new contract for some 49,000 U.S. factory workers.

The deadline, announced in a letter to local UAW officials on Monday, marks the second time the union has threatened a nationwide walkout against a U.S. automaker in less than a month in a bid to reach a labor deal.

The union struck General Motors Corp. for two days in September before the two sides agreed on a new contract.

In the letter to local UAW officials, UAW President Ron Gettelfinger said many difficult issues had been discussed involving wages and benefits of UAW workers at Chrysler.

"The company has thus far failed to make an offer that adequately addresses the needs of our membership," said the letter, which was posted on a local union Web site.

Gettelfinger said the indefinite contract extension with Chrysler would end at 11:59 p.m. Tuesday, and Chrysler workers would go on strike unless the "basis for a tentative agreement" was reached by 11 a.m. Wednesday.

The UAW ultimatum came after a weekend of intensive negotiations with the newly private automaker, which is controlled by Cerberus Capital Management LLC.

Talks at Chrysler's Auburn Hills, Michigan, headquarters ran until almost 4 a.m. Tuesday in a marathon session that began Monday morning.

Chrysler had several concerns about the UAW-GM contract, which has been seen as a template for a Chrysler pact, sources said earlier. The issues included funding for a health-care trust and commitment of specific products in the United States, the sources said.

Of about 180,000 UAW-represented workers at the three Detroit-based automakers, Chrysler has the smallest work force at roughly 49,000.

The impact of a strike against Chrysler would be muted by a series of plant shutdowns the automaker has already undertaken to get rid of unsold inventory in the face of slack sales.