Union leader: Job cuts to be less than Jeep's worst-case scenario

4/27/2001

A union leader for Toledo Jeep workers said yesterday the company has privately told him 1,600 to 1,700 jobs will be cut starting this summer - about 300 to 400 less than the worst-case scenario presented by Jeep officials.

But there remained plenty of issues up in the air three days after Jeep's parent company, DaimlerChrysler AG, told city and state officials it would lay off up to 2,035 Jeep workers starting June 22. That is when production of the Jeep Cherokee ends.

The notice has sparked a debate between the city's biggest employer and Mayor Carty Finkbeiner. The mayor claims the company is not living up to a deal to provide 4,900 jobs in exchange for $276 million in tax abatements and site preparation for a new Jeep assembly factory on Chrysler Drive. That factory is producing the new Jeep Liberty sport-utility vehicles to be sold starting next month.

Bruce Baumhower, president of United Auto Workers Local 12 at Toledo Jeep, briefed the Toledo-Lucas County Port Authority board of directors yesterday on the issue. He is a port board member.

“I'll let Bruce Baumhower speak for himself,” Daimler spokesman Trevor Hale said when asked about the union leader's statements about the car maker's layoff plans.

The company has been unwilling to talk about how many people it will have working after the layoffs because of uncertainty about the exact number, Mr. Hale said.

“It depends on the market,” he added. “We're hoping the market takes off. Early feedback is very positive on the Liberty. We hope we have to build more vehicles.”

Mr. Baumhower told the port board that he expects there will be about 3,500 workers on the job in September, a forecast that is close to the mayor's estimate of 3,300.

While that is far short of the 4,900 workers the company had indicated it would employ when it negotiated the deal for the new factory four years ago, Mr. Baumhower said the company is partially correct in arguing that it has met its commitment to the city.

That is because many of the workers to be laid off will still be paid by the company, at least 95 percent of their pay as spelled out in the union contract with the company, he said. As such, the company counts those workers as on the payroll, even though they are not producing Jeep vehicles.

Workers hired during the current contract, which began in 1997, do not receive such long-term pay benefits.

Those hired before that who are laid off because of lower vehicle sales are to receive 95 percent of take-home pay, which includes company-paid compensation and state unemployment compensation. Those laid off because of automation or technology are to receive 100 percent of take-home pay, covered fully by the company. Such benefits last the length of the contract, which expires in September, 2002.

Mr. Baumhower The estimated that slightly less than half the 1,600 to 1,700 expected job cuts are due to automation. About 280 are the result of production cuts in the Jeep Wrangler.

Another 650 cuts will involve temporary workers who will receive 95 percent of pay for up to six months, he said.

The union hopes to minimize the affect on workers by convincing the company to offer voluntary layoffs to higher seniority workers and retirement incentives to workers eligible to retire or nearing eligibility.

Managers have signaled they are open to such proposals. “In the near future, the company will be working with the UAW on various programs to minimize the impact of reductions in the Toledo work force,” the company said in a statement this week.

Mayor Finkbeiner contends that Daimler made a firm commitment to the city to employ 4,900 people. Mr. Baumhower told port members, however, the promise clearly sets a number of conditions.

“It doesn't say they commit to 4,900, so there's a legal rub,” Mr. Baumhower said.

In an interview after the meeting, the union leader explained why the company says there are 6,200 people on the Toledo Jeep payroll and why the mayor says that figure is exaggerated and should be 5,300.

Daimler arrives at its figure by counting workers on the job as well as about 500 people on long-term leave due to illness and injury, 200 who fill in for workers on vacation, and 90 people who are on-call and used during days when there is high absenteeism, Mr. Baumhower said.

That total is close to the 6,200 used by the company, and which spokesman Mr. Hale said is accurate and which he will not break down. He was not available yesterday to comment on Mr. Baumhower's breakdown.

Mr. Baumhower emphasized that, while the union contract won income security for workers, it is different from the city's deal in that it doesn't include a pledge of 4,900 jobs.

The biggest difficulty for the union will come in September, 2002, when a new contract will need to be negotiated and thus the need for continued payments or additional work that would return the laid-off UAW members to the job, he said.

“Our challenge is in a year and a half from now, when our collective bargaining agreement expires.”