An Early Christmas at Chrysler

By Stephen Koepp

"I've got a smile on my face this morning," declared United Auto Workers President Owen Bieber at 3 a.m. last Wednesday as he announced a tentative end to the strike by 70,000 of Chrysler's U.S. employees. The weary union leader had good reason to be pleased. In a final, 42-hour bargaining session with Chrysler officials, Bieber won increases in wages and benefits that will put the company's union workers back on a par with their counterparts at Ford and General Motors. The settlement brought an end to the concessions Chrysler's workers made to help the now thriving company get through its financial crisis during 1979-82.

Bieber drove a four-barreled bargain. At one point last week, the 6-ft. 5-in. union chief met with Lee Iacocca in the Chrysler chairman's office in a session complete with desk pounding, raised voices and colorful language. When Bieber finally presented the new three-year contract to his ten-member U.A.W. bargaining committee, the group gave him a round of applause and approved the deal unanimously. U.A.W. leaders predicted that the rank and file would ratify the deal early this week and return promptly to work.

Chrysler's workers will receive most of the items on their wish list. Current employees will get an immediate bonus of $2,120, plus a 2 1/4% raise that will bring Chrysler assemblers up to the wage of $13.34 an hour. Late next year Chrysler employees will get a 2 1/4% lump-sum bonus and in 1987 a wage boost of 3%. Chrysler's 10,000 Canadian workers, who settled earlier in the week, will receive less lucrative bonuses because their concessions during the bad years were smaller.

Chrysler's top negotiator, Thomas Miner, pronounced the company "pleased" at the settlement. The strike, which began Oct. 16, had been costing the company an estimated $17 million a day. While the price tag on the new contract will be a daunting $1 billion over the next three years, the company was in no position this time to play tough with its workers. Morale has suffered because blue-collar employees felt they were missing their share of the company's bounty. The firm last year had profits of $2.4 billion, and is expected this week to announce hefty third-quarter earnings. Said Reno Pietrantoni, 53, a millwright who has worked 26 years for Chrysler: "The bonus is really a drop in the bucket compared to what we lost over the last five years." By one estimate, Chrysler workers gave more than $15,000 each in wage concessions.

Chrysler officials had hoped, though, to win significant changes in work rules. They wanted to boost productivity by reducing job categories from some 500 to half a dozen, thus requiring employees to perform a wider variety of tasks. The U.A.W. rebuffed that concept, but it acquiesced on another issue. The union agreed to a three-year contract instead of the two-year agreement it had proposed. The U.A.W. had aimed for the shorter term because its Ford and G.M. contracts will expire in 1987, and the union wanted to bargain with all three automakers at once, a strategy that tends to give labor a stronger hand.

Despite all the smiles, last week's pay agreement could turn out to be something of a Pyrrhic victory for the U.A.W. Detroit automakers are bracing for a stronger than ever invasion of cars from Japan and Korea, where labor costs are lower. To remain competitive, U.S. car makers are trying to reduce their dependence on high-paid U.A.W. workers. Chrysler currently relies on subcontractors and foreign manufacturers for as much as 70% of the components in its autos. As U.A.W. salaries go up, the company is likely to use more and more of those products. --By Stephen Koepp. Reported by William J. Mitchell/Detroit

With reporting by Reported by William J. Mitchell/Detroit