Experts Expect Thorny Negotiations Between Chrysler and UAW

When contract negotiations stumbled last month between the United Auto Workers and Chrysler, the automaker’s CEO Sergio Marchionne criticized his union counterpart in a public letter. When deadlines passed, he declared new ones rather than continue open-ended extensions. Now he wants to remove a cap on the number of entry-level workers.

UAW president Bob King has already reached agreements with General Motors and Ford this fall. Negotiations with Marchionne and Chrysler will likely be the most arduous yet.

“Chrysler is in a different situation because their balance sheet isn’t as beautiful and the profits haven’t started to fall in,” Kristin Dziczek, a labor analyst at Ann Arbor, Mich.-based Center for Automotive Research, tells Bloomberg News while explaining Chrysler’s harder-line stance.

According to her organization, Chrysler’s hourly labor costs, including benefits, averaged $49 per hour, compared with $56 at GM and $58 at Ford before the contract negotiations began, according to the Detroit Free Press. Chrysler has not yet returned to profitability since emerging from bankruptcy in 2009.

King said the UAW brings some leeway to the negotiating table, but that “we’re not going to give one company an economic advantage over another company,” he tells the Detroit News. “… But as flexible as we were at Ford and did some things differently, we’re flexible at Chrysler.”

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