Chrysler Seen as Likely Choice for Strike Target

08/23/96

Reuters has reported that Chrysler, Ford, and GM have each been lobbying hard to get the United Auto Workers to pick it as the union's strike target for upcoming negotiations. Traditionally the UAW picks one of the Big Three, sets a strike deadline and then concentrates all of their bargaining effort on forging a contract with the target company before the strike deadline expires. When the UAW irons out an agreement with the target, they take it to the other automakers to sign. The carmakers all want to be this year's strike target because of the latitude that position gives them to craft an agreement that matches their specific situation.

The union's choice of a strike target is supposed to be announced after a meeting of the union's bargaining committees today (Thursday), although unconfirmed reports say the union has decided not to make a firm decision, yet. The union's triennial contract, which covers 400,000 hourly auto workers, expires on September 14. The union's bargaining committees began meeting with the Big Three companies in June. UAW President Stephen Yokich has said that his chief priority for the upcoming contract is job security.

Speculation among industry analysts has the union opting for Chrysler as its strike target for the first time in 23 years. Harley Shaiken, a labor relations professor at the University of California-Berkeley, said he favors Chrysler as the target because it is expanding and does not face the same need to slash costs and shed thousands of parts-making jobs that GM does to become competitive.

Some of the UAW's local leadership has also said they think the union should bargain with Chrysler first, cement the pattern at Ford and take it to GM last. Whitey Hale, president of UAW Local 326 at GM's Delphi Interior and Lighting Systems plant in Flint, Mich.--a plant that GM is trying to sell-- said that picking GM as a strike target might lead to a major national strike.

"I think it probably will be Chrysler," Hale said. "You don't really want to get tangled up at GM. There are too many problems at GM."

Earlier this year GM weathered a 17-day strike over at two Dayton, Ohio, brake plants that practically shut down the automaker's entire North American operations and cost it $900 million. That strike was over outsourcing, the practice of giving work to outside companies, thus taking it away from a company's employees.

Chrysler is flush with cash, currently the most profitable of the Big Three and eager for labor peace. Chrysler Chairman Robert Eaton explained his desire for Chrysler to be bargaining's target by saying, "We'd like to see that pattern fit our situation as opposed to somebody else's."

Ford was the UAW's target company during the last round of contract negotiations in 1993. Its cooperative relationship with the union could prove attractive to UAW leaders, and Ford has encouraged some of its suppliers to allow the UAW to organize their plants, which could help stem the UAW's membership decline.

Lehman Brothers analyst Joseph Phillippi said he believed the union would find it easier to give special consideration to GM if it settled with Chrysler and Ford first.

Analysts expect process improvements at GM to cut the time it takes to build cars and parts, leaving GM with the desire to slash thousands of jobs and workers over the next several years. Many workers will retire over the next several years, and the UAW may allow GM not to replace them in exchange for some restrictions on outsourcing.

"They have to cut a deal with GM on one issue--managing attrition over the next five or six years," Phillippi said.

If the UAW picks a target at today's meeting, they will be about 10 days ahead of their typical schedule. That will give it more time to resolve contentious issues without a strike. Another new facet of this year's negotiations is greater cooperation with the Canadian Auto Workers union. CAW President Buzz Hargrove said the two unions were exchanging more bargaining information than in the past. Hargrove will participate in the meeting to determine the UAW's target. The CAW usually chooses a different target than the UAW.

Paul Dever -- The Auto Channel