Many leaders of the United Auto Workers are voicing concern about the contract agreed to by the union’s negotiating committee last week, an agreement that ended a six-hour nationwide strike against Chrysler.

Their opposition to the contract centers around the creation of a two-tier wage structure, the offloading by Chrysler of responsibility for retiree health care into the laps of the union, and what they say is the lack of job security guarantees by the company.

Dissent by union leaders surfaced at a meeting of the UAW’s Chrysler Council held Oct. 15 at Detroit’s Cobo Center. The Chrysler contract, discussed at that meeting by leaders of union locals from across the country, is similar to the agreement between the UAW and General Motors.

Tom Littlejohn, president of Local 1268 in Belvidere, Ill., said he was one of the leaders who opposed the contract. “I’m not recommending that the workers in my plant ratify this agreement,” he said.

The union announced that the local leaders had approved the contract. Littlejohn said, however, that officials had not taken a roll-call vote inside the council meeting and that the voice vote appeared too close to call. “Had I been in charge, I would have called for a count of the house,” he said.

The Chrysler plant he represents was the first auto assembly plant in the country where a large-scale two-tier wage system was introduced almost two years ago. Workers there, along with the UAW local at the plant, have been fighting to eliminate the system, “The second-tier workers do the same work and they should get the same pay,” Littlejohn said. “In our local they are no less important than anyone else.”

One member of the Chrysler negotiating team told the World that there were serious problems with the agreement, “particularly with setting up a two-tier wage system and with the lack of specific commitments from Chrysler to keeping jobs.”

There were reports that Bill Parker, the head of the UAW bargaining committee, urged leaders at the meeting to turn down the contract. He handed out a leaflet at the meeting that was critical of the lack of job guarantees by Chrysler and the establishment of the two-tier wage system.

The contract with Chrysler does not guarantee work beyond the length of the new four-year contract and in some cases doesn’t go beyond the current production cycle for various models.

Other parts of the Chrysler contract were similar to the GM contract, including establishment of a union-run health care trust for retirees. Chrysler will contribute $10 billion to set up the voluntary employees beneficiary association, or VEBA, to cover $19 billion in obligations to 78,000 retirees.

Chrysler demanded and got health care concessions that the union gave to GM and Ford in 2005, which diverted raises for active workers to pay for retiree health care. The concessions are worth $340 million to Chrysler.

Workers at Chrysler will also give up some of their cost-of-living hikes.

As with the GM contract, observers in the labor movement see the two-tier wage system as the worst feature of the contract. With huge cash buyouts and with expected retirements, the lower tier could become the main tier in the next four years. This is seen as particularly rough for young workers who will soon be the majority.

Meanwhile, GM has released details that show the UAW is about to become the company’s biggest shareholder. The union-run VEBA will hold 16 percent of GM stock, making it the biggest shareholder.

Observers in the labor movement fear an array of problems connected with the union becoming a major “player” on Wall Street and the resulting “conflict of interest.”

Another aspect of the two-tier systems in the auto contracts is drawing fire as additional details emerge.

The companies will no longer pay retirement health care benefits for newly hired workers, even if they ever reach full status in the company. Instead of post-retirement medical benefits, these new workers will receive 401(k) funds that they are supposed to save, somehow, to pay for medical care after retirement.

jwojcik @pww.org

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