Chrysler workers reject pay cuts

Chrysler workers reject pay cuts
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DaimlerChrysler AG is playing hardball with union workers at a Brampton,
Ontario, plant who refused to accept concessions that included a pay cut of
$115 a week and the outsourcing of janitorial jobs, Canadian Auto Workers
officials said Wednesday.

The carmaker has told CAW leaders it will not alter the proposal rejected
last month by workers at the suburban Toronto factory. And unless union
leaders can convince the workers to change their minds, Daimler Chrysler
will halt plans to invest $700 million that would have landed the assembly
plant a new, unidentified vehicle beginning in 2010, the CAW officials said.

"Chrysler has left very little room, in fact, no room to negotiate," said
Ken Lewenza, chairman of the CAW's national bargaining committee for
Chrysler. "Chrysler told us based on economic challenges, it has alternative
places to invest and is not prepared to go back to the bargaining table. It
doesn't take a rocket scientist to know that Newark (Del.) and St. Louis
(facilities) are not at full capacity."

Chrysler spokesman Dave Elshoff declined to comment.

Chrysler builds the Chrysler 300C sedan and the Dodge Magnum wagon and
Charger sedan in Brampton. Plant officials recently learned the factory
would also build the 2008 Dodge Challenger.

Chrysler planned to pump $700 million into the factory to support 2010 and
2011 models and add a fifth vehicle analysts predict could be a production
version of the concept Imperial large sedan. That vehicle would be built on
the next-generation of the LX platform that underpins the 300C and other
models, to be called LY.

But like rivals Ford Motor Co. and General Motors Corp., Chrysler wants
concessions from local plants before they are awarded future work. All three
automakers are trying to cut costs as they restructure to restore profits.

The rank-and-file refusal to approve the concessions illustrates how tough
these ratifications can be when a company is in a volatile state, said
Harley Shaiken, a labor expert at the University of California, Berkeley.

"This is a critical issue any time you've got concessions on the table and
sort of a volatile atmosphere," Shaiken said. "Even when the top leadership
and the local leadership see no other alternative, the rank-and-file might
be angry, apprehensive and take it out on the vote."

Chrysler lost $1.5 billion last year and announced a turnaround plan in
February that would trim production capacity by 400,000 over the next three
years by idling one factory, eliminating shifts at others and cutting 16
percent of its workers, including 2,000 union jobs in Canada.

"What this specific plant indicates is how tough restructuring can be on a
local level," Shaiken said.

Chrysler wants the Brampton workers to give up "premium pay" that was
negotiated when the company was in much better financial shape, said CAW
president Buzz Hargrove.

The proposed concessions didn't cut hourly wage rates but eliminated pay for
about 40 minutes a day -- time spent not working but preparing for work,
Hargrove said. Chrysler also wanted to outsource about 40 janitorial jobs to
union workers who would get a lower wage, Hargrove said.

Brampton workers rejected the deal, which was negotiated by CAW leaders and
the automaker, by a 1,464 to 1,157 vote.

Shaiken called the outcome of the vote a "pretty significant defeat," but
added that members who opposed Chrysler's proposal could be persuaded to
change their minds.

"All the volatility around Chrysler right now may have caused some workers
to dig in their heels," he said. "But there's a lot at stake for the future
here."

Bruce Belzowski, a researcher at the University of Michigan Transportation
Research Institute, said U.S. auto manufacturers' constant aim to reduce
costs is driving them to request givebacks and outsource work to lower-wage
contractors.

"This is not something that is going away. It's going to happen as much as
the manufacturers will be able to convince the unions to allow them to do,"
Belzowski said.

Chrysler is in the midst of cutting 2,000 jobs in Canada. Of that, 1,300 are
in Windsor -- currently home to 5,500 Chrysler employees who build SUVs and
minivans. Brampton will lose 345 jobs.

Hargrove said the Detroit automakers' declining fortunes have pushed Canada
from the fourth-largest producer of automobiles in the world to eighth in
2005. On Sunday, Hargrove will address the Brampton workers to explain
Chrysler's tough stance, CAW officials said.

The workers have the option to decide to vote again on the proposal or let
its rejection stand.

"This is a democratic union," Hargrove said. "In the end, they are the ones
who will have to decide."