UAW, Chrysler Reach Tentative 4-Year Contract

The United Auto Workers union reached a tentative four-year contract with Chrysler Wednesday, hours after going out on strike and the same day General Motors workers ratified a separate four-year pact.

Next up: Ford.

A person with knowledge of the Chrysler LLC agreement said it includes some guarantees that vehicles will be produced at U.S. factories, a company-funded union-run trust that will pay much of Chrysler's $18 billion in long-term retiree health care costs, and a lower wage scale for some newly hired workers.

The person, who requested anonymity because the contract has not been ratified by union members, said new vehicle guarantees are not as extensive as those given by General Motors Corp.

The new product guarantees, which translate into job security for union workers, are in many cases only for the life of current products, the person said.

GM made guarantees at many factories that include the next generation of cars, trucks and parts.

The new lower wage scale, the person said, covers new hires who would replace Chrysler Mopar parts transportation workers. Buyout and early retirement offers would be made to current workers in an effort to get them to leave, the person said.

The lower wage scale is similar to the one negotiated by GM, the person said.

UAW President Ron Gettelfinger said the strike against Chrysler LLC, 80.1 percent owned by private equity firm Cerberus Capital Management LP, would end immediately and workers should report for their next available shift.

"This agreement was made possible because UAW workers made it clear to Chrysler that we needed an agreement that rewards the contributions they have made to the success of this company," Gettelfinger said in a statement.

Gettelfinger wouldn't release any details of the contract, but Chrysler said the tentative agreement includes the retiree health care trust. The newly private company didn't say how much money it will contribute to the trust.

"The national agreement is consistent with the economic pattern and balances the needs of our employees and company by providing a framework to improve our long-term manufacturing competitiveness," Chrysler Vice President and Chairman Tom LaSorda said in a statement.

Chrysler's national UAW contract covers about 45,000 workers and 78,000 retirees and spouses.

Brett Ward, a material handler at Chrysler's Sterling Heights assembly plant, said Wednesday night he had not been given details of the agreement.

But he feared that it would have a lower-tier wage structure for new hires that was similar to what the union negotiated with GM. In the next contract, he's afraid Chrysler will negotiate wages downward for all workers similar to a deal between the UAW and troubled auto parts supplier Delphi Corp.

"They made it one tier again, but a much lower, undesirable one," said Ward, a member of Soldiers of Solidarity, a group often critical of the union.

Kevin Bork, a senior designer at a Chrysler technical center, said his primary concerns are health care and stopping the outsourcing of jobs.

"I'm very happy that the strike didn't last very long and we'll all be returning to work," he said. "Now it's just a matter of seeing what the offer is."

The UAW said its historic contract with GM, which also includes a retiree health care trust, was approved by 66 percent of production workers and 64 percent of skilled trades workers.

The deal, reached Sept. 26 after a two-day nationwide strike, establishes lower pay for some workers and makes promises for future work at U.S. plants.

UAW members at 19 of 24 U.S. Chrysler factories and several other facilities left their jobs for the picket lines at 11 a.m. Wednesday and stayed out for about six hours.

Among the major issues in the Chrysler talks were the retiree health care trust; the company's desire to outsource parts-trucking jobs; promises that future products will be built at U.S. factories; and parity with health care concessions that were given to Ford Motor Co. and GM two years ago.

A majority of Chrysler workers will have to ratify the tentative agreement before it can take effect. Ford will be the final automaker to bargain with the UAW.

Chrysler became a private company shortly after the contract talks began in July. Cerberus bought its share of Chrysler from the former DaimlerChrysler AG in a $7.4 billion transaction in August. Chrysler is now a private company without publicly traded shares.

Chrysler has 24 U.S. manufacturing facilities, including 10 assembly plants. The automaker had already planned to idle five assembly plants and some parts making factories for short stretches during the next two weeks in an effort to adjust its inventory to a slowing U.S. automotive market.

Workers didn't strike the Warren Truck assembly plants in Warren, Mich.; Newark, Del., assembly; Jefferson North assembly in Detroit; Belvidere assembly in Belvidere, Ill., and the Conner Avenue assembly plant in Detroit.

Talks between the UAW and Chrysler began in July but accelerated last weekend.