Reply #26: He may be right to be worried -- the article in the OP doesn't tell the whole story. [View All]

UAW’s Chrysler Equity Is Small Comfort as Union’s Power Wanes

May 1 (Bloomberg) -- The United Auto Workers’ equity in Chrysler LLC is small comfort compared with the damage the automaker’s bankruptcy inflicted on the union’s bargaining power, labor analysts said.

UAW President Ron Gettelfinger said in a statement the union’s retiree health-care fund had accepted a 55 percent stake in Chrysler in return for cutting in half the automaker’s $10.6 billion cash obligation to the fund.

The UAW now has 26,800 members at Chrysler, one-fourth as many as in 1979. Its Chrysler equity could turn out to be worthless, leaving retirees with curtailed health insurance, if the company’s fortunes don’t turn around quickly, said Harley Shaiken, a labor analyst at the University of California at Berkeley.

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The harsh uncertainty of the union’s future was brought home Thursday when Chrysler announced a shutdown as long as two months at most of its factories because suppliers are halting shipments. When production resumes, the company will be operated by partner Fiat SpA with a new nine-member board.

On Wednesday, workers voted yes because UAW leaders said the new contract could prevent a bankruptcy and help keep factories operating, said Paul Thayer, 47, a welder repairman at a Chrysler stamping plant in Warren, Michigan.

“Obama said none of the plants would close, and two hours later they sent us home,” said Thayer, a 17-year Chrysler veteran. “So now, whom do we call a liar, the president, the UAW or Chrysler, or are they all in bed together?” Thayer asked.