UAW and Chrysler will not reopen contract Essay

The United Auto Workers formally asked Chrysler Corp. to reopen their contract for the purpose of regaining compensation parity andreturning to the smae bargaining cycle as General Motors and Ford MotorCo. However, back-and-forth communications between the parties finallyresulted in a decision to not bargain early.

(The UAW–Chryslercontract does not include a specific provision for reopening negotiations and is not scheduled to expire until October 15, 1985.)The disparity began to develop in 1979, when Chrysler employeesnegotiated the first of several concessionary contracts to aid thecompany in overcoming its financial difficulties. In 1982 and 1983settlements at Chrysler, the disparity was narrowed, but at the time ofthe reopening request, Chrysler workers were still earning about $1 anhour less than employees of the other companies, and they were notcovered by job and income security plans equal to those at GM and Ford. Chrysler rebuffed the union’s request for a reopening becausethe union wanted to set a deadline for completing the talks, backed bythe right to strike. However, Chrysler did offer to discussmodification of the pay and benefit provisions of the contract, despiteits contention that matching Ford’s and GM’s pay and benefitlevels would result in labor costs higher at Chrysler than those at GMand Ford because of a higher proportion of retired employees drawingpensions and medical benefits at Chrysler.

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The union responded to Chrysler’s decision by calling for ameeting of its Chrysler Council, composed of 150 local union officials.At the meeting, the union leaders decided not to accept Chrysler’soffer because of the lack of the strike weapon. As a result, bargainingwill not start until August 1985.


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