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Pressemeldungen

UAW and Chrysler Reach Tentative Agreement

October 11, 2007
Northville, Michigan

UAW members went on strike at 11:00 am Wednesday, before reaching an accord with Chrysler late in the afternoon, resulting in the loss of fewer than 2,200 units. Extensive downtime scheduled for the week mitigated the impact of the strike as US plants were already scheduled to operate at less than 40% of normal daily output. Heavy inventories of large pickups and compact light trucks are not expected to warrant the use of overtime to make up modest production losses.

Strike Impact: UAW - Chrysler

Expected Outcomes

• Pensions and Healthcare: Though not as great a priority for Cerberus/Chrysler due to its younger workforce, the agreement includes a provision for an employee health care trust or VEBA among other changes expected to improve the company’s competitiveness. Chrysler was likely able to garner additional healthcare concessions due to the fact it did not obtain such an agreement like those at General Motors (2005) and Ford (2005).
• Jobs Bank & Job Security: In the past year, buyouts at GM and Ford drew thousands off the jobs bank rolls. As further capacity reductions are made, the OEMs will seek to rewrite language to preclude idled workers from the costly jobs bank unless the layoff is temporary. A more substantial issue is the ability to match GM’s guarantees to keep facilities open and commit to new investment. In this environment of global platforms and a competitive marketplace – we expect Cerberus/Chrysler was very careful to ensure that ‘fixed’ costs were not baked into this part of the agreement.
• Simplifying Work Rules: Greater use of MOAs/COAs are anticipated along with higher production flexibility. Two-tier wage agreements are expected to alleviate some of the ‘manufacturing’ disadvantage yet due to its younger work force, a two-tier wage scale has less applicability to Chrysler than Ford or GM.

Impact of the Work Stoppage

We expect Cerberus/Chrysler was able to craft an agreement that incorporates common key provisions including funding of a VEBA, healthcare concessions, employee flexibility and a more flexible investment framework to better fit Chrysler’s situation. The main goal of Cerberus/Chrysler is to quickly improve its current cost position and maintain high flexibility in making decisions.

We will continue to monitor the situation and will keep you informed as events warrant.

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