The approval of the UAW contract with Chrysler is going badly. Several local chapters of the UAW have voted it down. The workers at these plants are upset that the car company will continue to produce cars in Mexico and lacks concrete product plans for some of the manufacturing locations in the U.S.
If workers are going to give concessions on pay, they expect more from Chrysler in terms of future car-building in the U.S.
Chrysler wants to rescue the contract and avoid a strike. It appears to be willing to go to great lengths to do so.
Reuters writes that "Chrysler has guaranteed that it would keep some U.S. factories running well beyond the 2011 expiration of a proposed contract with the United Auto Workers union if the deal was approved." That is a big concession to get the union to vote in favor of the contract on the table.
While this maneuver may work for Chrysler, it will put Ford (NYSE: F) in a tough position. Ford may now be the weakest of the Big Three. Its unit sales have dropped about 20% each of the last two months. If the UAW thinks it can get Chrysler to buckle under on promises for the future of certain large plants, it is likely to ask Ford to make the same expensive pledges.
Being the last of the U.S. car companies to cut a deal with the UAW may cost Ford more than it wanted to give.
Douglas A. McIntyre is an editor at 247wallst.com.
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