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Chrysler LLC is Hoping Bankruptcy Can Be Used to Rewrite Union Contracts

October 28, 2008

Analysis of:"GM, Chrysler Deal Could Spur UAW Concessions, " Detroit Free Press, October 20, 2008 | www.freep.com

The domestic auto industry already negotiated dramatic wage, healthcare, and pension benefits from the UAW during the last round of contract talks. Some of those concessions though have not been realized yet. For example, the wage concessions were to drop the standard hourly wage from ~$26/hr down to ~$16/hr. However, the new wages were not applicable to existing workers. So the savings is not realized until an existing worker retires or takes a buyout and a new worker is hired. The auto companies have implemented extensive programs to encourage workers to leave, but they have not been as successful as would be necessary to really provide significant economic benefits to the companies yet.

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