Chrysler/UAW: What's Wrong With The Contract
CNBC Auto and Airline Industry Reporter
I watched the latest vote results from rank and file United Auto Workers at Chrysler and thought to myself, "what do these people want?" Through the weekend an estimated 11,000 UAW have rejected the tentative contract the union agreed to with Chrysler.
Some 6,000 have voted in favor of it. When UAW locals vote on a contract, there's no indication of specifically why rank and file members do not like the contract.
But from talking with people in the union and reading reports on contract votes around the country, there is an undercurrent that comes through. The rank and file want more guarantees, much as GM gave its locals. This is understandable since UAW members want the comfort of knowing the company plans to build a particular vehicle at a particular plant over the next four years.
That's the problem with this contract. Chrysler, and its parent Cerberus Capital, want the flexibility to build models, move models, discontinue models as the market dictates. That means not locking itself in to guarantees. Look at how Chrysler President Jim Press is gearing up to decide the fate of certain models. Some of those no doubt built at plants where local members want job guarantees.
Chrysler needs the flexibility it is seeking. Its pipeline of products is still shallow and needs to be developed. If the market changes and CUV's fall out of favor (which I doubt will happen) Chrysler needs to be able to adjust as needed.
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