UAW Chief Faces a Restive Union After Chrysler Deal Rejection

By Jeff Bennett And Christina Rogers 

Two weeks ago, United Auto Workers President Dennis Williams appeared on the verge of restoring the long-sidelined union to a prominent role in the auto industry.

He was near to a deal for higher wages from a Detroit auto maker, had found broad support for his health-care purchasing co-op and was touting a more collegial relationship with auto makers.

How quickly things have changed. Today, Mr. Williams is facing a membership revolt at Chrysler, a strike at Ford Motor Co. this weekend, and little chance of wringing a richer contract from Fiat Chrysler Automobiles NV after his tentative deal was soundly rejected by members.

Just 15 months into his term as the head of a union with 140,000 Detroit Three members, Mr. Williams faces the difficult task of shifting sentiment in favor of the Fiat Chrysler deal, which members rejected largely because it allowed a despised wage system to continue for at least four more years.

"I think there were very high expectations that were not met and a big lack of trust," said Kristin Dziczek, a director with Ann Arbor, Mich.-based Center for Automotive Research. UAW officials have "to do some damage control and show the membership they care."

The last time a tentative UAW master contract with a Detroit auto maker was voted down by membership was more than 30 years. Chrysler workers, in 1982, rejected a proposal from the auto maker as it was recovering after winning federal loan guarantees to stay afloat. Doug Fraser, the union's chief at the time, eventually signed a one-year pact.

Chrysler, now merged with Fiat, is the fastest growing U.S. auto maker and expected to join General Motors Co. and Ford in reporting healthy third-quarter profits in North America. While Fiat Chrysler's offer to its 37,000 UAW workers included raises, signing bonuses and profit-sharing schemes, it fell short of eliminating a controversial two-tier labor scheme and made none of the product investment guarantees that are customary in such deals.

Mr. Williams is unlikely to get much help from Fiat Chrysler Chief Executive Sergio Marchionne. Currently in Italy, Mr. Marchionne and his management team are unwilling to sweeten their offer, said people close to the company, and consider it Mr. Williams's job to "repackage" the deal and sell it to his membership.

Mr. Williams's likely course, said the people familiar with the negotiations, is getting production pledges in writing and luring a bigger signing bonus than the $3,000 now on the table.

Union members' frustration with officials also is bubbling up at a Ford factory near Kansas City, Mo., where local negotiators are unhappy with the auto maker's unwillingness to meet their terms and have made preparations to strike. The local represents 7,500 workers building the Ford F-150 and other vehicles. Talks have stalled on issues such as seniority and the organization of manpower, said UAW members.

UAW Vice President Jimmy Settles, who is overseeing the contract negotiations in Missouri, has been known to disagree with Mr. Williams on union strategies, including on communications tactics.

Ford has begun pivoting some of its production by adding mandatory overtime shifts at another F-150 factory in Dearborn, Mich., and by notifying a supplier to divert truck frames to Dearborn, Mich., from Missouri.

"We work every day to avoid a disruption of our production, and we are confident we will be able to negotiate a fair and competitive labor agreement with our UAW partners," a Ford spokeswoman said.

A strike, could tarnish the union's image at a time when it is hoping to still court workers at foreign automotive plants and supplier factories operating in the southern U.S. It would also be poorly received by lawmakers who helped bail out auto makers and their tens of thousands of UAW workers in 2009.

UAW Local 685 President Carl Greenwood, who attended Thursday's meeting with Mr. Williams, said Fiat Chrysler workers aren't preparing for a strike. He represents workers at the auto maker's Kokomo, Ind., plant.

"People want the same wages and I get that," he said. "Believe me I have laid awake thinking about how to do that. There has to be a road map and it has to be done over the next four years of the contract."

Write to Jeff Bennett at [e-mail] and Christina Rogers at [e-mail]

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(END) Dow Jones Newswires

October 02, 2015 19:08 ET (23:08 GMT)

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