April 27th, 2009
08:30 AM ET
12 years ago

UAW agrees to 'painful' concessions to save Chrysler

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/POLITICS/04/26/money.uaw.chrysler/art.chrysler.afp.gi.jpg caption="Chrysler, in talks to merge with Fiat, had an April 30 deadline to come up with a viability plan."]
(CNN) - The United Auto Workers union announced Sunday it had reached an agreement with Chrysler, Fiat and the U.S. government that meets the requirements of the Treasury Department for loans to the auto giant.

In a statement, the UAW said the deal was still subject to ratification by union members at Chrysler.

The "painful" concessionary agreement, the UAW said, "includes modifications to the union's 2007 collective bargaining agreement and the Voluntary Employee Beneficiary Association (VEBA) trust."

Union members must approve the deal by Wednesday, the statement said.

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Filed under: Auto Bailout
soundoff (33 Responses)
  1. TomJay

    UAW should not have agreed to concessions. UAW should just have fought to save benefits in bankruptcy.

    April 27, 2009 09:14 am at 9:14 am |
  2. Sam Schmidt

    The union's members should throw out the bums that have caused so much turmoil in the auto industry. The UAW has created so much expense to the car companies just for the sake of their own power to the point the workers are over-paid enormously for the small amount of expertise that is required to do the jobs. Get rid of the unions and the American car companies can thrive again.

    April 27, 2009 09:15 am at 9:15 am |
  3. Mississippi Mike

    I'm glad the UAW is feeling some pain. They've all but ruined the American auto industry and we spend billions of dollars helping the automakers pay off the retirement benefits of former union members. Now that GM is going bankrupt, taxpayers are are left with even more debt caused by the corrupt UAW's abusive contracts.

    April 27, 2009 09:17 am at 9:17 am |
  4. George

    How much are the executives giving up? Yes they are laying off white collar people, but are the ones left taking concessions also? I doubt it.

    April 27, 2009 09:20 am at 9:20 am |
  5. A Real American

    Where are the painful concessions on the part of the employing class?

    Why must it always be labor who gives and gives while the corporate geniuses who ran their companies into the ground walk away with huge bonuses and golden parachutes?

    April 27, 2009 09:22 am at 9:22 am |
  6. Bob from Pittsburgh

    The reality is that autoworkers make too much money, with very little education and low skills.
    Compare the following:

    Graduate engineer $30K to $50K / year start salary
    Auto worker $60K to $70K start wage + benefits = $90K / per year total package to start
    Graduate research student (to become a PhD) $8.00/hour no benefits
    Graduated PhD starting salary $30K to $40K / per year .

    Autoworkers must get a bit of reality

    Ok you out there come with the comments..!!

    April 27, 2009 09:22 am at 9:22 am |
  7. JP

    Since the UAW is the biggest reason that the big 3 are failing its about time they did something.

    April 27, 2009 09:24 am at 9:24 am |
  8. Baze

    Hey, would they rather make painful concessions, or be terminated altogether?

    April 27, 2009 09:39 am at 9:39 am |
  9. charlie in maine

    Franlky I was hoping that Potiac would be coming out with the electric muscle cars. 0-60 in 5.5 seconds and the only imissions would be from the squealing tires. As the say in show-biz "timing is evereything".

    April 27, 2009 09:51 am at 9:51 am |
  10. Mari( maybe one of my comments will be posted)

    To everyone dumping on Unions:

    IF it were not for unions, we would not have had FAIR WAGES, healthcare for employees, or pension plans!

    The FAILURE of the U.S. Auto Industry lies squarely on the shoulders of the CEO's & Management for NOT HAVING A VISION...... FOR REFUSING TO ..... SEE....... THAT THEY WERE NOT MAKING QUALITY VEHICLES!

    It is sad that so many will lose their jobs, while the big shot CEO's walk off with their millions! There is simply something profoundly unjust about this!

    April 27, 2009 09:53 am at 9:53 am |
  11. Dougie Peters

    You mean Billy Joe Bob finally realized getting $35 bucks an hour to screw on lugnuts was a license to Steal?

    April 27, 2009 09:56 am at 9:56 am |
  12. Mark, B'ham., Al.

    The Unions had better concede because the customers need to be taken care of first as anyone in business knows and if they did not help the company there would be no jobs and the retirements would be turned over to the goverment funding which would be a paycut for their retires with their free medical gone. Now the lenders need to work with them. Yes I do drive a Jeep so as a customer I am concerned about repairs and parts

    April 27, 2009 09:57 am at 9:57 am |
  13. jody

    Why can't they get rid of the union? The union does not care about the employees. They would save a lot of money if they fired the union.

    April 27, 2009 10:01 am at 10:01 am |
  14. Josh

    I have to agree with the majority here, auto unions have inflated domestic automobile production costs and in turn US automakers had to cut corners to keep up with foreign competition, thus reducing quality. Now the government has taken financial stock in paying off union contracts and health benefits.

    It's time for the UAW to sink with the ship, in my opinion!

    April 27, 2009 10:12 am at 10:12 am |
  15. Bill in Illinois

    Well – "What goes around comes around". The unions are now starting to reap the benefits of the seeds that they have been sowing for so many years. While they were at one time useful and served a purpose that ceased years ago and they became obsessed with themselves and their main mission seemed to be to see which of the big three they could screw the worst when it came to contract time. Then they have the audacity to blame the companies for not producing quality vehicles: HELLO – did you folks not assemble them? How is the company the one to shoulder the responsibility for your shoddy workmanship? Oh yes, I forgot, They were dumb enough to hire you and actually pay you an exorbanant wage for performing your sloppy work.

    When you want to talk about greed and excess you need look no further than the unions. They wrote the book.

    April 27, 2009 10:16 am at 10:16 am |
  16. Fair is Fair

    April 27th, 2009 9:14 am ET

    UAW should not have agreed to concessions. UAW should just have fought to save benefits in bankruptcy.
    ____________________________

    I say let them go to bankruptcy. Any bankruptcy judge worth his or her salt would nullify the ludicrous benefit package of the UAW.

    April 27, 2009 10:17 am at 10:17 am |
  17. David

    Wow... those really look like "painful" concessions.

    April 27, 2009 10:22 am at 10:22 am |
  18. America Shrugged

    The comments made here about letting the unions dissolve is pretty disgusting. Those making the comments don't work for unions and use the RW tactics to spread hate of Unions and make sure the propaganda works. UAW workers do not make 90 bucks an hour with wage/benefit packages. A few months ago, it was 50-75 thousand, now it's 90. I wish you bashers/haters would make up your mind. When there isn't one union left, there is no incentive for employers to compete with other companies in wage and benefit packages. Corporations and the RW GOP have you brainwashed.

    April 27, 2009 10:36 am at 10:36 am |
  19. A little sad

    Sad that the biggest problem with the benefits package for the UAW is that they have a good health plan, compared to the foreign competitors have government subsidized health systems.

    But the same people who are claiming that the union workers have too generous a benefits package will also be screaming loudest to derail any changes to the way health costs are paid in the US.

    I wish they would apply some logic here. I guess if you have your healthcare paid for, you don't care about the next person.

    Hopefully the person next to you without healthcare doesn't come down with swine flu.

    April 27, 2009 10:36 am at 10:36 am |
  20. Gina

    Fire the union? The union are the workers, and it's only as good as its elected leadership.

    April 27, 2009 10:38 am at 10:38 am |
  21. Juan from L.A

    You know what these American automakers just don't get it. They are now coming with a stupid promo of deceiving the public of buying two cars for the same price but its not true its buying two cars of the same kind at a low price.
    Who in the world goes to a car dealer to buy two cars?
    Who goes and buys of the same model?
    C'mon now. I hope they go bankrupt. I'm tired of bailing people out. That's why although I voted for Obama, his goon of Geintrich or whatever his name is, is just using my money to bail out incompetent companies like this.

    April 27, 2009 10:40 am at 10:40 am |
  22. Juan from L.A

    You know what these American automakers just don't get it. They are now coming with a stupid promo of deceiving the public of buying two cars for the same price but its not true its buying two cars of the same kind at a low price.
    Who in the world goes to a car dealer to buy two cars?
    Who goes and buys of the same model?
    C'mon now. I hope they go bankrupt. I'm tired of bailing people out. That's why although I voted for Obama, his goon of Geintrich or whatever his name is, is just using my money to bail out incompetent companies like this!!!

    April 27, 2009 10:42 am at 10:42 am |
  23. Bella Caruthers

    I can't comprehend the reason a union has such strong authority over the management of a corporation. These political/manipulative unions need to be controlled or made illegal.

    April 27, 2009 10:44 am at 10:44 am |
  24. Bill

    This is to Mari, and yes this is a dump on the unions. I myself am a business owner and if the unions tried to come into my shop, I would shut down the company and reopen under a different name.

    I have not been a part of a union, nor would I ever be a part of a union. Employment is an example of a true free market system, you get paid for what you are worth, not what is dictated by the union. By putting a union in place, employees are not able to work outside their defined job title (union rules), which causes the company to employ additional people, or have slower response times to the changing market. I will say that no job is secure, you can work your butt off, and still be let go from a company, but that is LIFE!

    Like I said, I have never been a part of a union, however I have had to deal with them many times and I also have a brother that is an elected union official with the US Post Office. Look at the post office, does anyone realize that it has not showed a profit? The post office is subsidized by the government. Part of the reason for this is the effect of the union and their demands to increase pay.

    My own personal contact with unions has been with the many trade shows that my company attends. All the workers are part of a union and there is not just one union to deal with. Therefore, while setting up our booth, we are forced to "bribe" the workers to break the union rules.

    You are correct, Unions had a positive impact to the work force, when employee's had no representation. That time has passed, and at present, I personally do not see a need for unions in this day and age. I believe that the unions have taken advantage of their power at the sake of the company. The auto industry is a perfect example, with the compensation package they have continually fought for, the unions have made the US Auto industry non-competitive in the global environment.

    With any job that you accept, there is a negotiation of compensation package. This is available from the janitor all the way up to the CEO. Granted, the CEO will have a much better negotiating position, therefore his/her compensation package might seem out of line to the "worker" class, but it is not up to them to determine if this package is good or not, that is up to the person that is making the decision to hire (typically the board of directors). The government should have no say in what this package should be.

    correct me if I'm wrong, but didn't the CEO's of all the US Auto companies drop their salaries to $1 per year?

    I say get rid of the Union, let the Auto Industry go into bankruptcy, and allow them to work their way out. It will cause a lot of people hardship, but I believe that this will change the way people think about thier jobs.

    April 27, 2009 10:48 am at 10:48 am |
  25. Kevin in Ohio

    Awful noble of you UAW...... its about time, as you are the root cause of the auto industry in Detroit's problems.

    April 27, 2009 10:49 am at 10:49 am |
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