Bloomberg.com, October 23, 2007, Wednesday

Bloomberg.com, October 23, 2007, Wednesday

Bloomberg.com
Chrysler Workers at 3 Indiana Plants Reject Contract (Update2)

By Mike Ramsey

Oct. 23 (Bloomberg) -- Chrysler LLC employees at three plants represented by the United Auto Workers in Kokomo, Indiana, soundly rejected a four-year contract, increasing chances that the agreement will fail nationally.

UAW Local 685, representing about 4,500 employees at three transmission plants, rejected the contract by 72 percent, said President Guy Barger. Results were not immediately available for nearby Local 1166, a transmission casing plant also in Kokomo that voted today.

The rejection comes as momentum appeared to be building for approval as victories at smaller parts and engine plants were overcoming defeats at large assembly plants.

``The outcome is still certainly in doubt,'' David Lipsky, a labor conflict professor at Cornell University in Ithaca, New York, said before the Kokomo vote.

The result makes the outcome of voting at four plants in suburban Michigan, with about 9,200 workers, all the more important. The contract must be ratified by a majority of votes by Auburn Hills, Michigan-based Chrysler's 45,000 represented workers.

Balloting through yesterday appeared to favor yes voters. Local 1248, representing 900 parts distribution workers at four different centers in suburban Detroit, approved the contract by 86 percent on Oct. 21, President Harvey Hawkins Jr. said. And yesterday, Detroit Local 51 with 1,200 workers voted about 3-to- 1 in favor.

Fighting Opposition

As it stood before Kokomo, locals rejecting the contract so far represented about 11,160 workers, according to a Bloomberg tally; those approving have about 11,360. And those approving it have done so in larger percentages than those rejecting it.

Actual voting tallies haven't been available, so it is impossible to determine where the vote on the four-year contract stands.

Union officials have begun a campaign to counter ongoing anti-contract campaigning on Web pages and in materials being distributed at some locals.

Bill Parker, chairman of the union's nine-member national negotiating committee, has campaigned against the contract. He has said it doesn't provide the same guarantees for future work at U.S. plants as the contract the UAW ratified with Detroit- based General Motors Corp. earlier this month.

At Local 51, workers were greeted yesterday by local officers and a national representative handing out two different letters from members of the nine-member national negotiating committee.

`The Bare Truth'

One letter, titled The Bare Truth, refutes efforts by some union leaders to protest the tentative contract and makes a case for positives in the contract given the difficult situation Chrysler is in. It lost $680 million in 2006.

The letter does not name Parker, but every other member of the negotiating committee's name is listed at the bottom of the two-page letter.

``During this ratification process much misinformation has been spread throughout the system initiated by certain dissidents that enjoy the self-glorification and media attention,'' the letter reads.

Workers at Local 1700, representing a car assembly plant in Sterling Heights, Michigan, vote tomorrow. It is Parker's home plant. Union leaders were scheduled to hold informational meetings today at the plant.

That assembly plant, along with two stamping plants and a Dodge Ram pickup plant in Warren, may determine the outcome of the vote.

Final Vote

The final vote will be Oct. 26 in Belvidere, Illinois, at a plant that makes the Dodge Caliber, Jeep Compass and Jeep Patriot vehicles. It has about 3,400 UAW-represented workers.

So far, four of the five assembly plants to vote have rejected the contract. The only one to approve it is a small plant in Detroit that makes the Dodge Viper sports car.

If the vote fails, Chrysler and the UAW could strike or return to the bargaining table, where the union could ask for more guarantees of future work, Lipsky said.

The union could also immediately call for a revote or even postpone voting and move on to Ford Motor Co. and begin negotiations before attempting another recount.

The GM and Chrysler agreements create a union fund for retiree health care, instead of imposing this responsibility solely on management. The accords also will pay new workers about half as much as the current workforce.

The GM agreement followed a two-day strike and was ratified by two-thirds of workers.

Up Next

The UAW patterned its Chrysler agreement after GM's and hopes to use the same basic approach at Ford Motor Co. GM is the biggest U.S.-based automaker, followed by Ford and Chrysler.

Chrysler plans new investments totaling $15 billion for 55 of its 59 UAW-represented facilities during the next four years, spokesman Mike Aberlich said. At GM, some UAW factories were promised they'd start building newly designed models starting in 2013.

The ratification vote is the first for Chrysler as a closely held company. Cerberus Capital Management LP, a New York private-equity firm, bought Chrysler from the former DaimlerChrysler AG, now Daimler AG, in August.

To contact the reporter on this story: Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net

Last Updated: October 23, 2007 22:31 EDT