Chrysler is working with United Auto Workers on getting health care concessions similar to the ones Ford Motor Co. and General Motors Corp. got in 2005 and which saved the companies billions of dollars, concessions that the Union refused to do for Chrysler because of its stronger financial condition at the time. The UAW is considering health concessions for Chrysler now due to the fact that the company is not as profitable.

Union President Ron Gettelfinger said in an interview on "The Paul W. Smith Show" on WJR-AM in Detroit that the UAW has been talking to Chrysler frequently in search of a solution.

In 2005, Chrysler Group made $1.8 billion, but when gasoline prices rose to around $3 per gallon and buyers started to shun its truck-based models, turned its fortunes and the company declared $618 million losses in 2006 and $1.98 billion before interest and taxes during the first quarter of this year. Losses have forced Chrysler restructure and the company has announced buyout and early retirement offers to shed 13,000 hourly and salaried jobs in the U.S. and Canada by 2009.

Gettelfinger said in March that the UAW had finished a review of Chrysler's finances to determine if the concessions are warranted. Although he did not discuss details of the review, he did say that Chrysler has problems that need to be addressed. Senior industry analyst with Standard & Poor's, Efraim Levy said that Gettelfinger's statements indicate that a health care deal could be in the offing. "The fact that the union appears more ready to talk reflects the fact that the muddied playing field has become more equalized recently given the proposed transaction selling Chrysler to Cerberus, and of course, Chrysler's poor performance in the marketplace," he added.

UAW spokesman Roger Kerson and Chrysler spokeswoman Michele Tinson would not comment beyond Gettelfinger's remarks.

DaimlerChrysler AG, announced last month that it would sell a controlling stake of Chrysler to private equity firm Cerberus Capital Management LP. Analysts have said Cerberus likely will demand deeper concessions from the union than Daimler would have. Cerberus has said it will leave the negotiations to Chrysler, led by Chrysler Group President Tom LaSorda, Cerberus already having executives inside Chrysler's headquarters.


Publication date: 20 June 2007   

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