Highland Park, Mich.
The United Automobile Workers Union's new contract with the Chrysler Corporation contains a number of gains for the company's 66,000 union workers, but it may be more significant that the settlement restores industrywide pattern bargaining for the first time in nearly a decade. As a result, competition in the auto industry - at least among the Big Three - should focus more on the skills of managers than on the auto workers' wages, many experts agree.
There was little doubt the two sides would reach a settlement this week. They had, after all, publicly stated their intention of sticking close to the guidelines set last year with nearly identical contracts the UAW hammered out at the Ford Motor Company and General Motors Corporation.
Though company officials say the new settlement does contain some ``Chryslerizations'' unique to the No. 3 automaker, UAW president Owen Bieber made it clear there was ``no deviation'' from the key points of the pattern agreement.
Among the elements in the new contract are a ``ratification bonus'' of about $1,000; new job-security provisions, including a ban on new plant closings; and a a new profit-sharing program similar to those in effect at Ford and GM.
Notably, the profit-sharing program contains a unique clause that, for the first time, will mean no bonuses or stock options for company executives in a year when workers receive no profit-sharing.
UAW vice-president Marc Stepp hailed the linkage, which he said will guarantee ``that those who make the profits will share in the dispersal of those profits.''
Such a link had become a major union demand, since workers at GM have received no profit-sharing checks two years in a row, even though top GM executives have each taken home millions of dollars in bonuses.
From the union's standpoint, the other significant breakthrough is the restoration of pattern bargaining, with essentially identical contracts with the same expiration date in effect at each of the Big Three. (The new Chrysler contract will run just 28 months, so it will expire in September 1990, along with the Ford and GM agreements.)
Pattern bargaining dates back about 40 years, and was a cornerstone in the philosophy of the late Walter Reuther, the man who helped mold the modern UAW. Mr. Reuther believed that ``Workers [and wages] should not be the basis for competition among the auto companies,'' says retired UAW vice-president Irving Bluestone. Pattern bargaining fell victim to Chrysler's brush with bankruptcy in the late 1970s and early '80s.
Returning to the pattern today could be costly for Chrysler, says the company's chief negotiator, Anthony St. John, noting that Chrysler's average labor costs will now be about 50 cents an hour more than Ford and $3 an hour more than GM, largely because of Chrysler's larger number of retirees collecting pension benefits.
That disparity may not be as big a problem as it seems, however, since the UAW also agreed to put in place a number of new, local operating agreements that modify traditional union rules at individual Chrysler plants. These agreements can significantly increase productivity by doing away with inefficient work rules, among other things.
``This contract will measure just how good Chrysler's management is,'' says James Harbour, an industry consultant in Detroit. If Chrysler can use the operating agreements to increase productivity, Mr. Harbour says, the company can regain its position as the low-cost producer among the Big Three, a position now held by Ford.