Chryslers signing bonus: pink slip for workers

Rank-and-file roiled by job and shift cuts as tentative deal is reached with Ford

Less than a week after Chrysler workers barely approved a concessionary contract, the company’s Nov. 1 announcement that it will slash 10,000 hourly jobs, 1,000 salaried jobs and 40 percent of its contracting jobs rocked plant floors across the country. This job-slashing offensive is on top of 13,000 job cuts Chrysler announced last February, bringing the total layoffs to one-third of its workforce.

Thousands of workers reacted with shock and anger.

“They told us that if the contract was approved, we would get a $3,000 signing bonus, not that we would lose our jobs,” a second-tier assembly worker at the Chrysler plant in Belvidere, Ill., told the World. Most of the 600 second-tier workers at that plant, technically called “enhanced temporaries,” work on the third shift, the shift that Chrysler will immediately begin eliminating. “No one would have voted for this contract had we seen this coming,” the worker said.

On Nov. 5, meanwhile, leaders of UAW locals at Ford approved a new contract with that company. Union members at Ford are expected to complete their vote on ratification by Nov. 15.

Ford won even more concessions than those secured by General Motors and Chrysler. Ford agreed to fund an independent trust for retiree health care with $6.9 billion in cash, a much smaller percentage than GM or Chrysler had to come up with.

For Ford, this amounts to only 40 percent of the $17.3 billion it agreed to pay toward its total $23 billion retiree health care obligation. GM is paying 54 percent of its obligation in cash. Because of trust fund deals involving less cash and more stock, the union is likely to become a key, if not the major, stockholder in both GM and Ford.

The two-tier wage system in the Ford pact is more drastic than those set up at GM and Chrysler. All new hires, no matter what their job, will be paid the lower-tier wage and benefit package until a 20 percent of the total workforce “cap” is reached. At GM and Chrysler, workers hired into “core” assembly jobs can be hired into the first tier.

Ford promised to keep open several plants previously slated for closing, but, in the wake of draconian cuts announced by Chrysler right after contract approval there, Ford workers are wary about any company assurances. Many don’t see Ford’s promise to invest in the plants as a big victory, because the company plans to use money it owed to retirees for their health care for this new purpose.

Expected cuts already in the works at GM, Ford, Delphi Corp. and ACH between 2005 and 2009, including buyouts and early retirements, are at least 137,500. Add the Chrysler “October surprise” figures and the total U.S. auto job reductions reach 150,000. The total, from an analysis by the Center for Automotive Research, includes 34,410 hourly buyouts and retirements at GM last year, more than 30,000 jobs eliminated at Ford since 2005, and the planned shutdowns and sell-offs of 35 Delphi and ACH plants.

On top of this, thousands of jobs have been lost at other auto suppliers affected by downsizing, and the Big Three say there is more to come.

None of these figures include the additional thousands of jobs lost, as a result, in towns and communities across the country. Seen in this context, many economists fear that the cuts in auto will fuel a recession or worse.

News of the fierce Chrysler cuts stirred immediate fears among older workers, who feel more pressured than ever now to accept buyouts. If this happens, the company will be able to much more rapidly create a workforce whose majority is in the lower- paid second tier.

“Man, this is tough,” Andy DeRose told the press. DeRose, a 29-year Chrysler veteran who is a full-time first-tier worker at Belvidere, said, “If I get another buyout offer, I think it’s time for me to get on that train.”

Chrysler eliminated a shift at its Sterling Heights, Mich., assembly plant. “It’s devastating,” a worker there said. “We were told that if we approved the contract we wouldn’t go down to one shift, so we voted for it.”

At Auburn Hills, Mich., one-third of the 1,100 contract workers slated for layoff were terminated on Oct. 31. The rest will be fired between Thanksgiving and Christmas.

A high-level UAW source said the Chrysler contract would not have passed a rank-and-file vote had the layoff plan been known.

“They blindsided us on this one,” Bruce Baumhower, president of UAW Local 12 in Toledo, Ohio, told the Detroit News.

Fred Brereton, mayor of Belvidere, told local newspapers that “the loss of 1,000 jobs at the plant is a blow to our town.”

Auto job cuts and the two-tier wage system itself have had devastating effects on communities. (See story, page 9, “Two-tier wages: a community-killing virus.”)