DETROIT (Reuters) - The United Auto Workers has set a Wednesday morning deadline for agreement on a new contract with Chrysler and threatened to strike if a deal for almost 49,000 workers is not reached by that time.
The union gave Chrysler a strike deadline of 11 a.m. EDT Wednesday, a spokeswoman for the No. 3 U.S. automaker said. The notice came after a weekend of intensive negotiations between the union and the newly private automaker, controlled by Cerberus Capital Management LLC.
The impact of a strike against Chrysler would be muted by a series of plant shutdowns the struggling automaker has already undertaken to get rid of unsold inventory in the face of slack sales.
Five of Chrysler’s nine assembly plants with UAW-represented workers were idled this week. Another plant in Sterling Heights, Michigan, is scheduled to be shut down next week, people familiar with those plans said.
Even so, UAW local leaders said they were ready to send workers to pickets lines if the union calls a strike, as it did last month against General Motors Corp.
“We are right on time with everything and we are ready to go,” UAW Local 1268 President Tom Littlejohn told Reuters. “All we have to do is pull the trigger.”
Local 1268 represents some 3,600 Chrysler workers at a plant in Belvidere, Illinois, that the automaker has held up as an example of its shift a more flexible and lower-cost manufacturing strategy.
“We have no comment on negotiations at this time,” UAW spokesman Roger Kerson said in an e-mail.
Talks between Chrysler and the UAW resumed Monday morning at the automaker’s Auburn Hills, Michigan, headquarters after high-level negotiations intensified over the weekend, a person familiar with the talks said.
Negotiations between the two sides had been at a standstill for three weeks after the UAW agreed to extend Chrysler’s four-year contract to focus on larger rival GM.
By shifting to Chrysler as his next target, UAW President Ron Gettelfinger is betting that the union, which represents some 180,000 workers at the Detroit-based automakers, will be able to find common ground with Chrysler’s new private equity owner at a time when sales have sputtered.
Gettelfinger supported Cerberus’ $7.4 billion acquisition of Chrysler from Daimler AG, which retains a nearly 20 percent stake in the automaker.
GM and the UAW agreed on the terms of a cost-saving contract on September 28 that would give the largest U.S. automaker the ability to hire almost 17,000 lower-wage workers as higher-cost existing workers take early retirement packages still being hammered out by the two sides.
Chrysler has the smallest UAW-represented work force at roughly 49,000, compared with over 73,000 at GM and 58,000 at Ford Motor Co.
But Chrysler also has the highest total wages and benefits at over $75 per hour for the average factory worker, compared with $70 at Ford and $48 at Toyota Motor Corp’s U.S. operations.
Before the contract talks began, Chrysler made clear that unless the UAW granted concessions to close the wage and benefit gap with Japanese automakers operating in the United States, the automaker would have to shift production out of the country.
Additional reporting by David Bailey in Chicago, Jui Chakravorty in Detroit, editing by John Wallace