Chrysler Group wants specific assurances in this round of UAW talks that the union will not try to resuscitate pay raises, cost-of-living allowances and other fixed costs after the expected 2015 expiration of the agreement. Hit the jump to read the rest of the story.
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Chrysler has committed $4 billion in U.S. investment since coming under the control of Fiat S.p.A. in 2009. And CEO Sergio Marchionne is insisting on long-term labor cost stability that goes beyond the next four years, the source said.
“This change of culture, from the old ways of doing business, must apply beyond 2015,” the source said.
The assurances could come in the form of new contract language that would bind the UAW from seeking wage and benefit changes that would increase Chrysler’s overall fixed costs, including a new Jobs Bank program, through 2019, the source said.
The Jobs Bank program — discontinued in 2009 — guaranteed workers pay and benefits while laid off.
Chrysler spokeswoman Jodi Tinson declined to comment. UAW spokeswoman Michele Martin said the union would have no comment.
There’s precedent in recent UAW accords for provisions that run beyond a contract expiration. For instance, the no-strike clauses negotiated at GM and Chrysler in 2009 remain in place through 2015.
Marchionne said yesterday Chrysler cannot afford the same contract just negotiated by General Motors because Chrysler paid almost $2 billion in debt service over the past two years on government bailout loans.
GM wasn’t hampered by that financial burden because the U.S. government received equity for the $50 billion it lent the automaker.
Chrysler posted a net loss of $652 million last year and expects to generate an annual profit of $200 million to $500 million this year, excluding certain expenses.
GM, in contrast, posted net profits of $5.7 billion during the first half of 2011.
