The Deal
Monday, November 23, 
5:04 am

Chrysler contract faces hurdle

  Share     E-Mail    Discussion    Print Story

A rejection by rank and file members of a United Auto Workers-negotiated labor deal with Chrysler LLC remained a strong possibility following a “no” vote Tuesday by workers at two plants in Indiana.

More than 70% of members voting at two Kokomo plants rejected the deal, according to union officials, joining workers from at least six other plants in voting against the agreement. Exact vote tallies have not been released; however, most watchers believe the overall vote count is split about 50-50 on approving the four-year contract.

Continue reading below

Also on Dealscape

The outcome could be more clear by tomorrow, as more than 9,000 Detroit-area workers go to the polls on Wednesday. UAW officials have been heavily lobbying the workers, according to a Detroit News report, sending e-mails and memos, visiting factories and bringing in retirees to help make their case. (The final major vote is scheduled for Oct. 26, when Belvidere, Ill.-based workers are scheduled to weigh in.)

Still, opposition remains intense. Specifically, some workers are enraged by a concession that would establish a two-tiered wage and benefit system for future hires that came without the union winning firm guarantees for future North American vehicle production rates. The Detroit Free Press notes that one of the locations set to vote Wednesday is the Local led by Bill Parker, who according to the paper has been one of the most vocal opponents of the deal, leading many to believe that Wednesday’s vote could doom the contract.

A rejection would be a blow to the credibility of UAW President Ron Gettelfinger, and would force union and Chrysler negotiators back to the negotiating table. But when that would happen remains unclear. Sources have told TheDeal.com that should the rejection margin be narrow the union might return to Chrysler immediately, hopeful for a small concession that would sway enough voters to back the contract.

A union decision to instead open negotiations with Ford Motor Co., the only one of the Big Three without a negotiated deal, could indicate that leaders believe there is no simple solution and that talks could have to begin anew with Chrysler. The first round of talks produced a one-day strike at Chrysler before an agreement was reached. — Lou Whiteman

See Detroit News story on union lobbying
See Detroit Free-Press story on Wednesday's vote
See TheDeal.com story on the UAW's options





Post a comment





The Deal Pipeline

Deal Video


Inside The Deal: Avaya Inc.'s Mohamad Ali on the company's next target.


More video...

Crisis On Wall Street
Technology
Deals of The Decade

Community

Industry Insight

Managing your shareholder base

Growth companies and their PE sponsors should be wary of the pitfalls that arise when they layer on tiers of preferred stock.


Industry Insight

Easing the stress of distressed M&A

Corporate buyers face numerous complexities when trying to identify the right moment to purchase a distressed asset.


Editor's Note

Editor's letter: Nov. 16, 2009

Beneath the veneer of Wall Streeters beats the same heart, stirred by the same determinants of behavior.


footspacer.jpg footspacer.jpg footspacer.jpg footspacer.jpg footspacer.jpg


©Copyright 2009, The Deal, LLC. All rights reserved. Please send all technical questions, comments or concerns to the Webmaster.