Chrysler Group LLC and the United Auto Workers union failed to reach a deal on a new contract by the expiration of the current pact on Wednesday and Chief Executive Sergio Marchionne said he was willing to extend the terms of the expiring contract for a week.
Marchionne, who flew back to Detroit from Germany in a bid to finish negotiations with the union, said he was disappointed that UAW President Bob King had chosen to skip an expected meeting on Wednesday night.
We have known about this expiration for a long time, Marchionne said in a letter to King. Until now, there have been encouraging signs of a new paradigm governing the relationship between us.
A copy of the letter from Marchionne was obtained by Reuters.
Chrysler confirmed that a letter had been sent by the CEO but declined to comment on its content. A UAW spokeswoman could not be immediately reached for comment.
The letter marked the first sign of obvious tension in seven weeks of contract talks between the UAW and the Detroit automakers that are being watched in part as an indicator of how much the industry has changed since its near collapse two years ago.
Negotiations between the UAW and Chrysler's larger rival, General Motors Co, were continuing late on Wednesday night in Detroit.
GM has been the focus of the UAW's negotiating efforts led by King, although parallel talks have continued at Chrysler. Some close to the negotiations have suggested that both rounds of talks could conclude simultaneously.
Chrysler, which has operated under the management control of Fiat SpA since its 2009 bankruptcy, has about 26,000 UAW-represented workers in the United States.
This is the first time that Marchionne has been involved in contract talks with the union, which owns just over 40 percent of Chrysler stock through a trust fund charged with paying for retiree health care.
In his letter to King, Marchionne said he was leaving the United States on business and would not return until early next week. He said he was disappointed with the lack of a deal.
I know that we are the smallest of the three automakers here in Detroit, but that does not make us less relevant, he said. Our people are no less relevant.
Ford Motor Co and the UAW have agreed to extend the contract in place at the No.2 U.S. automaker, the only one of the Detroit Three to have avoided a government-funded bankruptcy.
The UAW surrendered the right to call a strike at GM and Chrysler as part of the restructuring of the companies.