13 December 2007

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

USA	Caliber, Compass, Patriot	Belvidere	Down
USA	Viper	Conner Avenue	Down
USA	Grand Cherokee, Commander	Jefferson North	Down
USA	Durango, Aspen	Newark	Down
USA	Ram Pickup	St. Louis North	Scheduled
USA	Grand Caravan, Voyager	St. Louis South	Scheduled
USA	Sebring, Avenger	Sterling Heights	Scheduled
USA	Liberty, Nitro	Toledo North	Down
USA	Wrangler/Wrangler Unlimited	Toledo Supplier Park	Scheduled
USA	Ram Pickup, Dakota	Warren Truck	Down

US Output - Units/Day @ full production (without downtime) ~7,650
US Output - Units/Day ~2,960

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.

13 December 2007

28 November 2007

14 November 2007

06 November 2007

02 November 2007

11 October 2007

25 September 2007

11 September 2007

22 August 2007

30 July 2007

23 July 2007

15 May 2007

30 April 2007

08 February 2007

16 January 2007

15 January 2007

08 January 2007

in the press

UAW and Chrysler Reach Tentative Agreement

October 11, 2007
Northville, Michigan

Strike Impact: UAW - Chrysler

Expected Outcomes

Impact of the Work Stoppage

archives

in the press

UAW and Chrysler Reach Tentative Agreement

October 11, 2007 Northville, Michigan

Strike Impact: UAW - Chrysler

Expected Outcomes

Impact of the Work Stoppage

archives

October 11, 2007
Northville, Michigan