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Chrysler reaches tentative deal with UAW

Marketplace Staff Oct 12, 2011
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Chrysler reaches tentative deal with UAW

Marketplace Staff Oct 12, 2011
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Jeremy Hobson: Now to Detroit, where the news came in about an hour ago that the United Auto Workers Union has reached a tentative labor deal with Chrysler. Chrysler is the last of the Big Three American automakers to finish negotiations with the union.

Alisa Roth covers the auto industry for Marketplace and she joins me live with the details. Good morning.

Alisa Roth: Good morning.

Hobson: So what do we know so far about this Chrysler deal?

Roth: Well so far, we don’t know most of the details. But here’s what we do know: the UAW represents 26,000 Chrysler workers who will have to ratify the agreement. The new contract calls for the creation of 2100 jobs by 2015 — that’s when this contract will expire. And it also calls for Chrysler to invest $4.5 billion in things like new and upgraded vehicles.

I talked to Alex Colvin — who’s a professor of labor negotiations at Cornell — about this. He says part of the problem has been the relative financial health of the companies involved.

Alex Colvin: To the degree that Ford was the one you’d look from the union perspective as the richest target, in a way. Chrysler is probably the weakest target here.

So that is that, Ford theoretically has the most to give, while Chrysler has the least.

Hobson: And Alisa, these negotiations have been going on for a little while now. What was it the two sides were talking about?

Roth: This round of negotiations was really about getting back concessions. During the financial crisis — when GM and Chrysler both went bankrupt, and Ford was teetering — the union gave up a lot to help save the industry.

The biggest thing they agreed to was this two-tiered wage system, which lets car makers pay new hires much less then current employees. There were other things too. And now that the auto industry is doing better — especially GM and Ford — the union has been very open about saying it’s going to try to get back those things it negotiated away.

Hobson: Marketplace’s Alisa Roth in New York. Thanks, Alisa.

Roth: You’re welcome.

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