SOUTHFIELD, MICH. -- Chrysler LLC said it has been given until tomorrow to reach an agreement on a new contract with the United Auto Workers union or face a possible strike.
The auto maker's previous contract had been extended while the UAW negotiated with General Motors Corp. The union, which is using the GM settlement as a model in the Chrysler talks, gave notice Oct. 6 that it's ending the extensions. The new deadline is 11 a.m. Oct. 10, company spokeswoman Michele Tinson said yesterday. She declined further comment.
Chrysler needs health care concessions for active workers that GM and Ford Motor Co. won in 2005, said John Casesa of Casesa Strategic Advisors LLC in New York. The talks also focus on a highlight of the GM contract, a company-financed health-care trust known as a Voluntary Employees' Beneficiary Association (VEBA). The union, taking another page from the GM accord, wants guarantees of future work at U.S. plants, Mr. Casesa said.
"Chrysler will be reluctant to make the job guarantees that appear in the GM contract," Mr. Casesa said in an interview. "Chrysler will be more resistant to funding the VEBA with cash; they'll be more interested in using debt."
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Chrysler, bought by Cerberus Capital Management LP in August, wants to concentrate most of its spending on quickly increasing revenue rather than making large investments that will take longer to yield results, Mr. Casesa said.
"A 100-per-cent pattern no longer exists," Mr. Casesa said, referring to the UAW's practice of using the contract it negotiates with the first U.S. auto maker as a template for the other two. As bargaining unfolds, Chrysler will seek to tailor the GM accord to its needs, he said.
UAW president Ron Gettelfinger decided Oct. 5 to delay negotiations with Ford to focus on Chrysler, the third-largest U.S.-based auto maker, people familiar with the situation said.
The decision to set a strike deadline at Chrysler echoes the union's strategy in its talks with GM, where it staged its first national walkout against the auto maker in 37 years. Following a two-day strike, a tentative agreement was announced.
UAW spokesman Roger Kerson would not comment yesterday on the possibility of a strike.
Progress was reported in weekend bargaining, but a person who had been briefed on the talks said that much work needed to be done on difficult issues. The person asked not to be identified because the talks are private. The UAW represents about 49,000 hourly workers at Chrysler.
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