Chrysler, Jeep Workers Reach Agreement

DETROIT September 13,2002 Reuters reported that DaimlerChrysler AG's Chrysler arm said on Friday it had reached a tentative agreement on a new labor contract with workers at the Ohio Jeep plant that builds its popular Jeep Liberty sport utility vehicle.

Chrysler spokesman Dan Bodene said no details of the new contract with United Auto Workers Local 12 would be released before union members vote on the deal on Sept. 24. Union officials could not be immediately reached for comment.

The 4,300 UAW workers in Toledo, Ohio, who also assemble the Jeep Wrangler SUV, had complained over the past year about workers being laid off despite mandatory overtime on the Liberty assembly line. The dispute escalated to the point that Chrysler Chief Executive Dieter Zetsche met with union officials and promised improvements.

As part of Zetsche's $4 billion turnaround plan, Chrysler planned to shed 19,000 hourly workers, most in the United States and Canada. In the past year, Chrysler executives have also vowed to improve efficiency at its factories, which has lagged behind General Motors Corp. and Ford Motor Co. for years.

The Liberty has been a sales success for Chrysler, with 108,739 sold this year through August. Chrysler executives have said the Liberty was commanding a higher price from consumers than competitors such as the Ford Escape.

The UAW local at the Jeep plant has had a contract separate from the UAW's national contract with Chrysler since the former Chrysler Corp. bought Jeep and the rest of American Motors Corp. in 1987. The new contract is a one-year deal to synchronize the local's contract negotiations with the UAW's four-year national contracts, which expire next year.

Shares of DaimlerChrysler closed down 67 cents at $40.53 in trading on the New York Stock Exchange.