DETROIT (Reuters) - Unionized workers at Chrysler Group LLC ratified a four-year labor pact on Wednesday, closing out the first round of talks since two of the three Detroit automakers nearly collapsed and took federal bailouts in 2009.
The new United Auto Workers contracts at Chrysler, General Motors Co and Ford Motor Co are not as lavish as deals struck in years past, as what the union’s leader Bob King calls the “21st Century UAW” made efforts not to weaken the companies during uneasy economic times.
The new contracts do not include base pay or cost-of-living increases that were hallmarks of labor agreements when the UAW wielded more power, had more members and the U.S. automakers dominated.
About 55 percent of the hourly workers at Chrysler voted in favor of the agreement. The deals at both GM and Ford passed by a nearly 2-to-1 margin.
At Chrysler, in a rare twist, nearly 56 percent of skilled-trades workers, who are a minority of the automaker’s 26,000 UAW-represented employees, rejected the contract. But UAW bylaws require that only a simple majority is needed to ratify a deal.
The deal reached at Chrysler, the weakest of the U.S. automakers, is not as rich as deals reached at GM and Ford. Union officials said the weaker deal was crucial to putting the company on firmer financial footing.
“It’s not everything our members deserve, but we did the best we could in these uncertain times and negotiated an agreement that will ensure Chrysler’s viability so that we can share in its economic success once it has regained financial stability.” UAW Vice President General Holiefield said in a statement.
King, in a press conference call on Wednesday evening, said the close vote at Chrysler boiled down to money.
“Money was a big, big issue,” said King. “There was a lot of frustration. These are everyday Americans ... Ninety-nine percent of us are facing a lot of struggles.”
Chrysler workers are guaranteed a signing bonus of $1,750 upon ratification, less than the $5,000 to be given at GM and the $6,000 signing bonus offered to Ford workers.
The contracts reached at Chrysler, GM and Ford will bring their labor rates closer to the rates paid at nonunion U.S. plants run by Japanese, Korean and German automakers.
The ratification of the Chrysler deal now paves the way for the UAW to focus on organizing U.S. plants operated by foreign automakers, which the union has tried and failed to do for nearly three decades.
With all three labor contracts in hand, King said, he would personally become actively involved in the UAW’s organizing efforts.
King said the UAW helped its organizing efforts by successfully reaching contracts without a strike at Ford or resorting to arbitration at GM or Chrysler.
The UAW is prohibited from striking GM or Chrysler until 2015 as part of the companies’ 2009 bankruptcy agreements.
“We made a lot of progress,” said King regarding talks with foreign automakers with U.S. plants. “A lot of it has been made in confidential discussions.”
King would not say which automaker is farthest along in talking about being organized.
The surprise rejection slowed the ratification process and prompted top UAW officials to hold a conference call with leaders of each Chrysler local union to determine if the skilled trades workers rejected the contract for reasons unique to that group, King said.
If skilled-trades workers had voted against the pact because of issues unique to them, the UAW executive board would have had to call for another vote, rework the contract’s skilled trades provisions or take those issues to arbitration.
But the union officials determined that these workers rejected the deal on broader issues that were not specific to skilled-trades workers. As a result, the deal was passed, the UAW said in a statement.
Chrysler is majority owned by Italy’s Fiat SpA.
Reporting by Deepa Seetharaman and Bernie Woodall; Editing by Bernard Orr, Phil Berlowitz