Union, in rare move, proposes to grant Chrysler new concessions
Chrysler Corporation will receive further concessions from its hourly workers in a rare reopening of a union contract to reduce an employer's labor costs. Responding to congressional requirements for federal loan guarantees to Chrysler, the United Automobile Workers (UAW) is expected to outline proposals Jan. 4 that would cut nearly $260 million from the cost of a three-year contract reached with the company late in 1979.
This would bring the total concessions to about $463 million, in addition to one year. The original agreement, ratified by Chrysler employees, was $203 million below the contracts UAW signed with General Motors and Ford -- the result of deferred wages and benefits.
Alfred Kahn, chairman of the Council on Wage and Price Stability, quickly denounced the settlement as "outrageous" because of Chrysler's critical financial situation. MR. Kahn also criticized the GM and Ford Settlements (for more than 30 percent over three years) as probable violations of President Carter's guidelines policy.
The administration and Mr. Kahn later tried to take some of the sting out of the criticism of the UAW-Chrysler agreement, saying, among other things, that the union would not have to make further concessions to help Chrysler get loan guarantees. However, many in Congress agreed with Mr. Kahn's criticism of a big cost settlement by a company nearly bankrupt and seeking federal aid. A number of key members of the House and Senate demanded that workers sacrifice more.
Although the UAW argued that it had done its part, it assured Congress that its members at Chrysler "are well aware of our responsibility, and we will not run from it." The union said further concessions would be given if necessary "to prevent the corporate failure that would hurt us so much."
Congress passed the $3.2 billion federal aid package just before quitting Washington for a month's vacation period. Within days, the UAW was at work seeking ways to cutting its settlement by $259.9 million as painlessly as possible for workers. It goals was to leave wage gains untouched, along with cost-of- living adjustments and pensions. A negotiator in Detroit said that "fiddling around with pay could result in a contract rejection by our members." Concessions appeared likely to be made through cuts in paid time off.
The proposals will be discussed with Chrysler Jan. 4 with possible negotiations continuing through the weekend. The union hopes for a new agreement before its 256- member national Chrysler Council meets in a week. UAW hopes for ratification of a new agreement by Jan. 20.