DETROIT – Thousands of Chrysler LLC autoworkers walked off the job Wednesday after the automaker and the United Auto Workers union failed to reach a tentative contract agreement before a union-imposed deadline. It is the first UAW strike against Chrysler since 1997, when one plant was shut down for a month, and the first strike against Chrysler during contract talks since 1985. Negotiators stopped talking after the strike began, according to a person briefed on the talks who requested anonymity because the talks are private.
Bargaining between the UAW and the newly private automaker has been slowed by several major issues. The UAW’s tentative contract with General Motors Corp. included job security pledges that it was likely to seek from Chrysler, while Chrysler wanted the same health care concessions that the union granted to GM and Ford Motor Co. in 2005. Also at issue was how much Chrysler would pay into a company-funded, UAW-run trust that would take on its roughly $18 billion in retiree health care debt. GM formed that trust as part of its tentative contract.
The UAW apparently is not striking at five plants that Chrysler already had idled this week because of sagging sales of some models, according to another person familiar with the walkout who asked not to be identified because the situation is in flux.
Brett Ward, a forklift driver at the Sterling Heights assembly plant in suburban Detroit, said he thinks a strike is justified, but he hopes the union can get a better deal than the one it reached with GM.
“Hopefully with a strike we’ll get some better gains and get a better contract in front of us,” he said.
The UAW, which must reach new four-year agreements with all three Detroit automakers, struck GM for two days before tentatively settling with the automaker on Set. 26. The union hasn’t yet agreed with Ford.
Chrysler has 24 U.S. manufacturing facilities, including 10 assembly plants. The automaker had already planned to idle five assembly plants and some parts making factories for short stretches during the next two weeks in an effort to adjust its inventory to a slowing U.S. automotive market.
Workers didn’t strike the Warren Truck assembly plants in Warren, Mich.; Newark, Del., assembly; Jefferson North assembly in Detroit; Belvidere assembly in Belvidere, Ill., and the Conner Avenue assembly plant in Detroit.
A short strike likely will have little effect on the automaker, which had a 71-day supply of cars and trucks on dealer lots at the end of August, according to Ward’s AutoInfoBank. A walkout longer than a month would start to cut into sales, said Paul Taylor, chief economist with the National Automobile Dealers Association.
Talks between the UAW and Chrysler began in July but accelerated last weekend. The union set the 11 a.m. deadline to settle or to strike.
The UAW’s national contract covers about 45,000 workers at Chrysler’s U.S. manufacturing facilities, making it the smallest of the Detroit automakers.
Chrysler was a wild card in this year’s negotiations because it was bought by the private equity firm Cerberus Capital Management LP shortly after the talks began. DaimlerChrysler AG, which is now called Daimler AG, sold a controlling stake in the 82-year-old Chrysler to Cerberus in August. The firm has since hired Bob Nardelli, formerly head of The Home Depot Inc., to be Chrysler’s chairman and chief executive. Chrysler Vice Chairman and President Tom LaSorda, who led Chrysler before Nardelli was hired, is representing the company in the talks.
Many industry analysts believe Cerberus will fix the money-losing Chrysler quickly, return it to profitability and sell it for a huge profit, perhaps to a foreign auto company that wants a stronger U.S. presence.
It was unclear how Cerberus’ plans for the company would factor in the talks.