UAW Says Chrysler Workers Approved Contract

Chrysler Group LLC workers approved a new four-year labor contract with the auto maker, the United Auto Workers union said on Wednesday.

The agreement passed with 54.8 percent of all those who voted favoring the deal, the UAW said. Ratification required the endorsement by simple majority of those voting, reported The Wall Street Journal. Skilled trade workers, a subset of union members, rejected the contract with 55.6 percent voting against the deal, the UAW said.

The rejection by skilled trade workers sent the UAW leadership scrambling Tuesday night and Wednesday. In the end, the UAW said it investigated the concerns voiced by the skilled trade and decided to ratify the agreement based on its constitution, which requires a simple majority of those voting for approval.

"You want to protect the rights of the minority but you can't let the minority override the majority," UAW President Bob King said in a conference call following the ratification. He said skilled workers could appeal the vote through the Public Review Board, an independent group established by the UAW.

The last-minute split vote was the final piece of drama in the Chrysler and UAW talks, which included two deadline extensions and an angry letter from Chief Executive Sergio Marchionne to Mr. King after the two failed to reach an agreement before the contract was due to expire Sept. 14.

Dissatisfaction with the contract, especially a signing bonus that is to be paid in two parts, was apparent throughout the week-long voting process with some union locals voting against the contract. Other members protested by not voting at all.

"The money was a big issue,"Mr. King said. "The Chrysler workers saw their brothers and sisters at Ford Motor Co. and General Motors Co. getting a lot more money and in one lump sum," he said. "I think that made a dramatic difference."

Chrysler's agreement provides a signing bonus of $3,000 with $1,750 to be paid once the contract is ratified and the remaining amount due after Chrysler returns to financial stability. There is also a bump in the hourly wage for entry-level employees. Chrysler, meanwhile, won't increase pay for veteran workers or offer a cost-of-living adjustment.

GM workers received a lump sum $5,000 bonus following ratification while Ford workers received $6,000.

Chrysler was the last of the U.S. auto makers to settle its labor contracts. GM and Ford contracts received majority approvals despite some UAW locals turning down the accords.

The auto makers are now expected to begin advancing projects they had held back pending contract ratifications. They include expanding capacity, reactivating plants or moving assigning future vehicle production to different U.S. facilities.

Ford is planning to add some of its Ford Fusion production to its Flat Rock, Mich., plant, while Chrysler intends to add new vehicles to the Sterling Heights, Mich., factory and General Motors will reopen its former Saturn plant in Spring Hill, Tenn.

Separately, Mr. King said a grievance filed by the UAW against Ford is set to go to an arbitration hearing on Nov. 17.

The grievance claims the auto maker violated an agreement to treat both the salaried and union workers equally after Ford gave its salaried employees raises and reinstated 401(k) matches before union workers last year.