Chrysler, UAW dig in for future plans

DaimlerChrysler

Marysville Mayor Gary Orr, center, presents DCX Executive Vice President, Manufacturing Frank Ewasyshyn, right, and UAW Vice President General Holiefield, left, with copies of his declaration of May 21, 2007 as DCX/UAW Day during the ceremonies.

Marysville's new $700M axle plant will employ 900

Josee Valcourt / The Detroit News

MARYSVILLE -- A senior United Auto Workers official said Monday that the union's relationship with new Chrysler owner, Cerberus Capital Management LP, is on good footing and the ownership change will not alter its bargaining approach in September.

"That relationship with Cerberus, as far as I'm concerned at this point in time, is alive and well," General Holiefield, UAW vice president, said at a groundbreaking for a $700 million Chrysler axle plant in Marysville.

At the Monday afternoon event, which included the customary shovels in the dirt and a local marching band, union and Chrysler officials made several references to the "new" Chrysler. The automaker will be renamed Chrysler Holdings LLC, if the sale is finalized as expected in the third quarter of this year.

The Marysville plant will employ 900 people and produce 1.2 million axles yearly. Construction begins this summer and the plant will reach full production by 2010. It replacses Chrysler's Detroit Axle plant, which was built in 1917 and now employs more than 1,600,

The UAW, the automaker and its new owner are excited about the newest chapter in Chrysler's history, Holiefield said. And, he added the private equity firm's ownership of Chrysler will not change the tone of contract talks.

"It's negotiation as usual," Holiefield said. "We're going to roll up our sleeves and we're going to do what we've always done over the many sets of negotiations that I've been involved in. We're going to hammer out the hard issues. We're going to get the job done."

He declined to comment on whether the union will give Chrysler similar health care concessions granted to crosstown rivals Ford Motor Co. and General Motors Corp.

'Trial and error' relationship

The UAW surprised its members on May 14 when it publicly backed DaimlerChrysler AG's blockbuster $7.4 billion sale of Chrysler -- its U.S. arm -- to Cerberus.

The union had previously opposed a Chrysler deal involving any private equity firm and had a tense relations with Cerberus, which was trying to acquire a stake in Delphi before dropping out of the deal earlier this year.

But, since the about-face, UAW leaders, which represent some 50,000 U.S. hourly Chrysler workers, has met with union local presidents in Detroit and hosted an online chat on its Web site to address concerns about the new owner.

When Daimler-Benz took over Chrysler in 1998, rank-and-file members had similar reservations. "We lived through that and I was still optimistic that we could make a go of it," Holiefield said.

"Certainly there's trial and error in whatever it is you do," he said. "We're going to go through that stuff. We're going to work it out."

After UAW leaders met with Chrysler and Cerberus last week, union officials walked away thinking "there was a lot to be accomplished between the company and our union," Holiefield said. "We have forged a partnership to build the finest products that we can possibly build for the American buying public."

$3B turnaround plan

Monday's ground breaking allowed company executives and union officials a chance to show that Chrysler is still investing in the future.

Chrysler's detachment from Daimler should give the automaker more leeway for future projects, executives said.

"Not that anything that was done was bad or wrong or anything else," said Frank Ewasyshyn, Chrysler's vice president of manufacturing.

"It's a matter of you get a chance to stand up on your own feet.

"You get a chance to do things to really break out of the marketplace and that's what we're looking forward to do."

The Marysville axle plant will produce a new family of parts for future Chrysler vehicles. It's part of the company's strategy to add more fuel-efficient models to its truck-heavy lineup.

In total, Chrysler is pouring $3 billion into new powertrains, axles and transmissions as part of its turnaround plan detailed in February.

The automaker will conduct a similar ground breaking on Wednesday for its new V-6 engine plant in Trenton.

The engine plant will replace the current engine plant in Trenton, which also employs about 1,600 people.