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Chrysler, UAW agree to continue contract talks

by Bill Cawthon on

According to a company statement released early this morning, Chrysler Group and the UAW have agreed to continue bargaining past the September 14 expiration of the national labor contract.

The statement goes on to say: “Chrysler will continue its efforts to reach a new agreement. Once we have an agreement, it is subject to ratification — a UAW internal process — and then implemented.”

Chrysler Group CEO Sergio Marchionne left the Frankfurt Auto Show and missed a meeting with German Chancellor Angela Merkel to fly back to Detroit; an action widely seen as an indication an agreement was imminent. However, UAW President Bob King was involved with the negotiations at General Motors, which the union has identified as its priority in the contract negotiations, and was not available to meet with Marchionne. Marchionne then sent a letter to King, expressing his disappointment.

Dear Bob,

It is now 10 p.m., September 14th, 2011 and the collective agreement between Chrysler Group LLC and the UAW is going to expire in a couple of hours.

You and I met last weekend and agreed that we had to get this new contract agreed and signed by today.

We have had a large number of people working on issues, 13 bargaining committees who since July 25 have been working diligently to resolve matters that are essential to the formulation of a new collective agreement that will take us into 2015. They have done their work, and we are down to the resolution of a few issues, primarily involving the economics for our employees for the next 4 years.

I flew back from the Frankfurt Motor Show late last night to be here today to finalize the dialogue that has been started by our teams but that required your presence and mine to conclude. You, unfortunately, could not be here, I am told, due to competing engagements.

We have known about this expiration for a long time.

It was discussed at length during an incredibly painful period in 2009 when we argued and pleaded, together, to be given a second chance to put Chrysler right. And we even agreed that were we still around in 2011, we would not go back to the old adversarial and confrontational ways of the past to resolve unsettled matters: that we would have someone else arbitrate our differences.

And so as I sit at my desk now, I am thinking of our 26,000 employees who tomorrow will be working without a new contract, without even an understanding between Chrysler and the UAW that the old one is extended. We have not even agreed on the procedures for arbitration.

Until now, there have been encouraging signs of a new paradigm governing the relationship between us.

We share a view that World Class Manufacturing is to be rapidly deployed throughout the organization to put dignity back in the workplace, to make our factories and our people safer, to produce high quality products by eliminating all waste from our processes.

We share a commitment to create a new order wherein our employees can share in the economic success of this new Chrysler, one in which we can gradually restore economic wellbeing to our people but in a manner which reflects and parallels both the improvement in the market acceptance of our products and the financial performance of the company.

These shared commitments are at the heart of the new Chrysler. They are the reason why notwithstanding the naysayers and again all odds, we are still here today.

They are the reason why Chrysler people, be they blue or white collar, have worked incessantly, with unwavering dedication and without hesitation during the last 27 months to bring Chrysler back.

These are the reasons why we have continued our investment programs in the US, committing more than 4 billion dollars without knowing the outcome of these labor negotiations.

You and I failed them today.

We did not accomplish what leaders who have been tasked with the turning of a new page for this industry should have done.

We did not manage to agree to a set of simple conditions that would have given certainty and peace of mind to the lives of more than 110,000 actives and retirees.

I know that we are the smallest of the three automakers here in Detroit, but that does not make us less relevant. Our people are no less relevant.

And they are certainly more relevant than some of the larger issues, including those on the international front, that are close to your heart but that do not impact on the quality of the lives of our people.

I need to travel out of the country now for business reasons and will return early next week.

I am willing to extend the current contract by an additional week to allow closure on all outstanding matters.

I hope you concur.



The UAW leader has not yet responded to the letter.

While it was hoped that at least one of the Detroit automakers would be able to reach an agreement by last night’s midnight deadline, it didn’t happen; all three car companies said they will extend the current contract for an additional week. Due to agreements made with the federal government as a condition of the bailout, workers at Chrysler and General Motors cannot strike and unresolved disputes must be presented for binding arbitration. Ford workers are not party to those agreements and have already voted to authorize a strike.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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