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Chrysler, Union Reach Agreement On 5-Year Pact

October 30, 1987

TOLEDO, Ohio (AP) _ Chrysler Corp. and the United Auto Workers have reached a tentative agreement on a new five-year pact covering 5,800 hourly workers at the Jeep plant here, Chrysler and union officials announced Thursday.

Both Chrysler and the UAW said the accord, reached late Wednesday night, ensured continued operation of the Jeep plant for at least the next five years.

But Chrysler only agreed to keep the plant open and maintain the current workforce in exchange for some contract concessions, the union said.

In addition to the 5,800 hourly Jeep workers here, the current contract covers 4,000 retirees and their survivors, as well as more than 1,300 laid-off workers.

″We’re happy to say that both sides are satisfied with it,″ said Jack Sizemore, regional director of UAW Region 2B. ″I believe our membership will be pleased with it. It’s a good agreement for both the Jeep worker and the company.″

Details of the tentative pact were not released, pending a union ratification vote. Sizemore said such a vote would be scheduled within the next 10 days.

Some UAW Local 12 officials, however, said concessions were involved, including a change in job classification rules. They said workers are now going to be trained to do different jobs to improve production and give the company more flexibility.

The new agreement also includes an ″efficiency test″ to see if Jeep workers are willing to work with the company to improve production.

Reportedly, if the test succeeds, Chrysler may introduce a new line in Toledo after the current model lines, including the Cherokee, run their course, the union said.

Dan Twiss, chairman of UAW Local 12, did not say if the proposed pact contains a pay increase. Jeep workers currently make $13.21 an hour, plus a cost-of-living allowance.

Twiss said Chrysler also indicated it intends to make a longer-term commitment to the Jeep plant, adding, ″They made that promise, and I trust them.″

Tony St. John, vice president of human resources for Chrysler, said the tentative contract calls for Chrysler to invest some money in the Toledo plant, but he would not say how much or precisely how the money would be used.

The agreement between Chrysler Corp. and UAW Local 12 was the result of talks that began Aug. 24, four days after the union voted to reopen its three- year contract with Chrysler and begin early negotiations.

When Chrysler bought American Motors Corp. for $830 million on Aug. 5, the company agreed to honor the UAW contract negotiated between AMC and Jeep workers.

But Chrysler then said it wanted Local 12 workers to agree to a contract more in line with what the automaker negotiated with the UAW in 1985. Twiss said the contract was similar to those signed with Ford and General Motors.

Some auto analysts had said the negotiations were crucial if Jeep were to stay in Toledo.

Late last month, Chrysler Chairman Lee Iacocca said the Toledo plant would survive at least through the life of its popular Cherokee line, which could be into the early 1990s.

Union members lent more than $40 million to AMC in the form of deferred raises and cost-of-living payments, with the understanding they would be repaid with interest.

Repayments were to be made under either profit-sharing or a plan based on vehicle production.

In 1984, AMC paid workers between $200 and $300 each. But AMC still owes about $60 million to workers at AMC’s Kenosha, Wisc. plant and $40 million to Toledo workers, or between $9,000 and $10,000 per worker.

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