Workers represented by the United Auto Workers ratified a four-year contract with automaker Chrysler LLC, the union said on Saturday, capping a close-fought battle that had threatened to scuttle the labor pact.
Hourly production workers at Chrysler voted 56 percent in favor of the new contract, which would allow the automaker to hire new workers at half the wage rate of current workers for a wide range of jobs in its factories.
The UAW represents some 45,000 Chrysler workers. The focus for union leadership now shifts to negotiations with Ford Motor Co., which is seeking deep concessions as it attempts to bounce back from a record $12.6 billion loss last year.
Among its cost-saving provisions, the Chrysler contract will establish a trust fund to take over the company's roughly $19 billion obligation for health care for more than 55,000 Chrysler retirees and 23,000 surviving spouses.
Union leadership had defended the deal as the best that could be won from the privately held automaker at a time when the American auto industry is looking to close factories and cut payrolls in response to a declining share of sales.
But the contract had faced opposition from rank-and-file workers and some union leaders over the past two weeks.
Our members had to face some tough choices, and we had a solid, democratic debate about this contract, UAW President Ron Gettelfinger said. Now we're going to come together as a union -- and now it's on the company to move ahead, increase their market share and continue to build great cars and trucks here in the United States.
The two sides had announced the tentative contract on October 10 after a six-hour strike at Chrysler.
Many Chrysler workers had objected to a historic concession that would allow Chrysler to bring in new workers outside the assembly line at just $14 per hour -- roughly half what the average UAW worker now makes.
The labor talks marked an important test for Cerberus Capital Management, the private equity firm that bought a majority stake in Chrysler from Daimler AG in a $7.4 billion deal that closed in August. Daimler maintains a nearly 20 percent stake in Chrysler.
The ratification margin was closer than an earlier vote on a parallel, four-year contract for Chrysler's larger rival General Motors Corp., and union leadership had actively campaigned to save it in a series of factory votes that wrapped up Friday.
At least nine UAW bargaining units at Chrysler, including major Chrysler plants in Indiana, Missouri and Detroit, voted to reject the contract. In addition, the deal won just 51 percent of votes among Chrysler's skilled trade worker.
Chrysler Vice-Chairman Tom LaSorda, who led the talks for management, said the just-ratified contract would allow the automaker to improve its long-term manufacturing competitiveness.
Gettelfinger had said he wanted to wrap up a contract with Chrysler before beginning talks with Ford.
Working-level negotiators from Ford and the UAW were meeting at the automaker's Dearborn, Michigan, headquarters on Saturday but high-level talks were not expected to begin until early next week, according to one person briefed on progress in the negotiations.
Ford, widely seen as the weakest of the three Detroit-based automakers, has already made it clear it will push for deeper concessions from the union than those offered GM or Chrysler.
In addition, Ford has indicated it was looking for about 8,000 to 10,000 additional factory job cuts. That would be in addition to the 27,000 UAW jobs cut as of June.
Ford, which lost its No. 2 spot in the U.S. market to Toyota Motor Corp this year, has seen its sales slide 13 percent in the first nine months of the year.