Chrysler Pact Returns to Parity with GM, Ford
Ruben, George, Monthly Labor Review
Chrysler pact returns to parity with GM, Ford
Contract uniformity returned to the domestic automobile manufacturers when Chrysler Corp. and the Auto Workers negotiated a 28-month agreement, bringing 66,000 employees up to the wage, benefit, and job security levels prevailing at General Motors Corp. (GM) and Ford Motor Co. Contract terms had been essentially identical at the three companies, but in the 1979 and subsequent settlements, Chrysler employees accepted terms providing for less wages and benefits than did Ford and GM employees to help Chrysler overcome financial difficulties. Throughout the concessionary period, union leaders vowed to return to parity, and movement toward the goal occurred in the 1982 and 1985 settlements, following Chrysler's return to profitability. Barring financial problems at any of the companies, uniformity presumably will continue, with current contracts at all three companies now expiring on September 14, 1990. (See Monthly Labor Review, November 1987, pp. 31 -33, for terms of the Ford contract and December 1987, p. 51, for the GM contract.)
Despite early indications that Chrysler and the Auto Workers would agree to a return to contract parity with GM and Ford, and the peaceful outcome of the talks, union officials criticized Chrysler for several events which occurred before and during the talks. One was Chrysler's announcement of plans to close its assembly plants in Kenosha, WI, at a cost of 5,500 jobs. In the national settlement, Chrysler agreed to additional measures to aid the displaced workers. Other controversial issues were Chrysler's announced plans to sell its 11 Acustar parts manufacturing plants (later revised, after an angry reaction by the union, to provide for retention of seven of the plants), and the size of bonuses distributed to Chrysler executives.
The new contract provides for an immediate $1,000 "early settlement bonus" (in cash or Chrysler stock), which reflected the fact that Chrysler employees, unlike Ford and GM employees, did not have a profit-sharing provision in their expiring contract. (Gm employees did not receive an annual profit-sharing distribution in 1988; Ford employees received an average of $3,700.) The Chrysler employees-who are now covered by the same profit-sharing formula as at Ford and Gm-had received $500 payments in 1988 under provisions of the old agreement which called for adoption of profit sharing either during the term of that agreement or as part of the 1988 settlement.
Like Ford and Gm employees, Chrysler employees will receive performance bonus payments in October of 1988 and 1989, each equal to 3 percent of their qualified earnings during the preceding 12 months. The provision for automatic quarterly cost-of-living pay adjustments also followed the pattern, except that a total of 15 cents will be withheld from adjustments to equalize the allowance with that for Ford and GM employees. …