UAW reaches tentative deal with Chrysler

By Poornima Gupta and Kevin Krolicki

DETROIT (Reuters) - The United Auto Workers union said on Wednesday that it had reached a tentative labor agreement with Chrysler LLC, ending a strike against the No. 3 U.S. automaker by some 37,000 workers within hours of when it began.

The UAW said in a statement it was calling off the strike against Chrysler, effective immediately. The union said the tentative agreement would protect wages, pensions and health care for UAW-represented Chrysler workers and retirees.

Both sides said the tentative agreement included establishing a trust fund that would take over responsibility for retiree health care.

That follows the pattern of a ground-breaking deal between the union and General Motors Corp. reached last month.

Details were not immediately available.

The deal now faces ratification by Chrysler's almost 49,000 UAW-represented workers.

Picketers outside Chrysler factories began to disband as word went out from local union branches about the settlement, which came just six hours after the strike began.

"Everyone is just relieved. No one wanted this to go on too long," said Michael Yanoulakis, a Chrysler electrician who was leaving a picket line in Sterling Heights, Michigan. "Now the membership will speak at ratification."

The UAW and Chrysler conducted their whirlwind negotiations under tight wraps and many workers said they were concerned about what concessions the union had offered up.

"It's good that the strike is over, but now I'm apprehensive," said James Mosley, 55, a Chrysler veteran of 35 years in Kenosha, Wisconsin. "What I want to know is what we got and what we had to give up."

Chrysler said in a brief statement that it expected the deal to improve its manufacturing competitiveness. It also said the deal was subject to review by the U.S. Securities and Exchange Commission.

The surprise settlement capped a dramatic showdown between the union and newly private Chrysler under the ownership of Cerberus Capital Management.

The UAW called a strike at 11 a.m. EDT when a marathon bargaining session failed to produce an agreement by a deadline the union had set earlier.

Some analysts had expected the gap between the two sides on key issues such as health care and job security to lead to a relatively long strike that would have also helped Chrysler run down some unsold inventory.

Instead, the Chrysler settlement came faster than the labor deal the UAW concluded with GM last month to cap a two-day strike.