Chrysler layoffs could complicate Ford-UAW talks

DETROIT (Reuters) - Chrysler LLC's announcement of up to 10,000 more layoffs could throw a wrench into contract talks between the United Auto Workers and Ford Motor Co (F.N: Quote), analysts said on Thursday.

After short strikes at General Motors Corp (GM.N: Quote) and Chrysler and a tough ratification vote at Chrysler, the announcement could make an agreement more complicated at Ford, Fitch Ratings managing director Mark Oline said.

"The rank-and-file would certainly want to have that much more assurance in terms of investment commitments and employment levels," Oline said of Ford workers.

CRT Capital Group analyst Kirk Ludtke said in a note that Chrysler's announcement could make it tougher for Ford to win needed concessions from the UAW.

Jerry Tucker, a former UAW regional director who lobbied against the Chrysler and GM contracts, said Ford workers may feel a sense of betrayal to a point, but that would not necessarily keep them from approving a contract.

"Ford workers should look at this just the same, that they could ratify an agreement one day and see massive cutbacks the next day," Tucker said.

The cost-cutting plan, which came within a week of UAW members narrowly voting to approve a four-year agreement with the privately held car maker left those who opposed the deal disappointed, but unsurprised.

Chrysler managers began to prepare for the restructuring months before talks with the UAW began or the company was bought by private equity firm Cerberus Capital Management (CBS.UL: Quote).

For some dissident UAW workers and former union officers who opposed the Chrysler agreement in October, the announcement sparked anger.

"There are a lot of very angry people, very upset, very sad," said Michael Yanoulakis, an electrician at the Sterling Heights Chrysler assembly plant. "The contract got ratified and we got burned. Morale is very poor. Everyone is just going through the motions. They feel defeated."

Bill Parker, chairman of the Chrysler Bargaining Council and president of UAW Local 1700 in Sterling Heights, Michigan, led opposition to the contract ratification. He declined to comment on the announced job cuts.

But Tucker, the former UAW regional manager, said, "They pushed the Chrysler contract through. Obviously, you are going to have a lot of unhappy Chrysler workers. There were a lot of unhappy Chrysler workers before."

Some of that could filter back to UAW leaders. UAW President Ron Gettelfinger has kept a low profile since announcing the controversial Chrysler agreement.

"There was no job security in the Chrysler-UAW contract," said Gregg Shotwell, a UAW worker at GM who has been a vocal opponent of the leadership in the contract talks this year. "The International UAW misled members."

Jane Lauer Barker, a labor lawyer who has represented several unions, but not the UAW, said the announcement could not have come as much of a surprise to UAW leaders, who likely got about as much as they could in terms of jobs savings.

"Maybe the timing isn't too helpful in terms of worker morale," Barker said. "There were a good number of workers who weren't too happy with the agreement that was negotiated."

Chrysler still committed to investing more than $15 billion in the business over the life of the four-year contract and agreed not to divest some areas of its business, she added.

Harley Shaiken, a labor expert at the University of California-Berkeley, said the announcement surely would have an impact on relations between Chrysler management and workers.

"If the job cuts are related to volume, they remain painful, but they are understandable," Shaiken said. "If the replacement products are built elsewhere, that is offshore, than you would have a real strain added to the relationship."