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Despite the pressure of Chrysler's April 30 deadline to pull off a rescue package - or face potential bankruptcy - the United Auto Workers has been in no rush to make concessions. "As I see it, the United Auto Workers union has a choice. They can [shed] some jobs or they can take a pay cut," says a financial consultant based in Detroit. "Naturally when you're faced with two bad choices, there is a natural tendency to procrastinate...
...foot dragging on Chrysler is affecting GM, too. In a Friday conference call with the media, GM chairman Fritz Henderson lamented that GM's own union negotiations are being slowed because the UAW won't move forward until the Chrysler/Fiat negotiations are resolved. That makes sense: Whatever terms Chrysler gets will be a precedent for GM, too. GM faces a June 1 deadline from the U.S. government to produce sufficient cuts to ensure viability...
...understandable why the UAW isn't rushing to embrace a new agreement. According to Harley Shaiken, a labor expert at the University of California at Berkley and occasional consultant to the UAW, the union and its Canadian counterpart are grappling with demands for big cuts in their wages and benefits - on the order of 25% to 30% - by Chrysler and Fiat. The demanded rollbacks could reduce wages and benefits, presently pegged at $29 per hour, by $6 to $8 per hour. "There is no doubt these are very serious cuts and they're being made under very tight deadlines...
...Union representatives in the U.S., however, complain the current demands go beyond those spelled out in the December loan agreement. The union has already committed to eliminating productivity bonuses due this year and next, to changes in the way overtime pay is computed, and to the elimination of the traditional cost-of-living allowances as well as to cuts in the special supplemental unemployment benefits for employees with less than 20 years seniority. Sources close to the negotiations tell TIME that the union has not yet agreed to the changes in funding Chrysler's health-care trust, which was established...
...knows where things are headed. "I don't think this is going to have a very happy ending," says one UAW official, who asked not to be identified. But he noted it was inevitable the union will have to accept additional cuts. One of the union's fears, though, is that the negotiations turn into a sort of arbitrage that sets active Chrysler workers against retirees - a split the UAW has always sought to avoid. "People are angry. Where do you draw the line and say to hell with it and just let them go into bankruptcy?" says one disgruntled...