Chrysler's Eaton Expects Labor Agreement Similar to New Ford-UAW Pact

09/24/96

Reuters has reported that Robert Eaton, Chrysler Corporation's chairman and chief executive, expects the company's next labor contract with the United Auto Workers union to look more like the pact that the UAW just bargained with Ford than like the deal the Canadian Auto Workers just bargained with Chrysler. Eaton said, "I think it's quite clear that if there's an agreement it will be more along the lines of Ford than what we got in Canada."

The CAW's recent tentative agreement with Chrysler limits the carmaker's ability to eliminate jobs through shifting work to outside suppliers. The pact requires Chrysler to create a new position when it eliminates a job through outsourcing.

The deal the UAW bargained with Ford, on the other hand, guarantees jobs for 95 percent of the automaker's 105,000 U.S. hourly workers. It also provides economic gains for workers, including a $2,000 lump sum payment in the contract's first year, followed by three percent base wage increases in years two and three.

The UAW generally uses the first agreement it signs with a Big Three automaker as a pattern for the other two companies to follow. During this round of bargaining, however, UAW president Stephen Yokich has said that the UAW will consider tailoring the contract to the individual abilities and needs of each auto maker.

Analysts say Chrysler can well afford all the conditions of the Ford contract; Eaton declined to comment on the terms of the UAW-Ford agreement. Eaton said he had not been notified about whether the UAW planned to bargain with Chrysler or General Motors next, although he said he expected the UAW to make a decision on Monday.

Paul Dever -- The Auto Channel