Chrysler reaches deal with UAW

DETROIT - Chrysler Group L.L.C. has reached a deal with the United Auto Workers union.

The automaker and union negotiators agreed Wednesday on a four-year contract that creates 2,100 jobs. The company also will invest $4.5 billion in its plants under the deal, which covers 26,000 U.S. workers.

The contract terms are less generous than those given to workers at General Motors Co. and Ford Motor Co. It includes a $3,500 signing bonus and $1,000 in annual bonuses. Most Chrysler workers won't get yearly raises but they could receive profit-sharing checks if the company makes money. The agreement also raises entry-level wages to $19.28 per hour by 2015 from between $14 and $16 now. Chrysler's workers must ratify the agreement.

This is the first contract since Chrysler's government bailout and trip to bankruptcy court two years ago, and the first since management of the company was taken over by Italian automaker Fiat SpA.

"This agreement is the latest in a remarkable turnaround for Chrysler," UAW vice president General Holiefield said in a statement.

Contract negotiations are closely watched because they set the pay and benefits for 112,000 factory workers at the Detroit Three as well as for thousands of employees at auto suppliers and at the non-unionized U.S. plants of foreign automakers such as Toyota Motor Co. and Volkswagen AG.

GM workers ratified their labor agreement last month. Ford workers are still voting.

Workers at GM are getting $5,000 bonuses. Ford workers stand to get $6,000 bonuses if they ratify their agreement. The less-generous deal at Chrysler is partly because the company isn't as healthy as its rivals. GM and Ford both made billions of dollars last year, but Chrysler lost money.

Entry-level workers make about half the wages of longtime union workers. The UAW wants the lower-paid workers to move up to the higher wage of around $29 an hour, but the company wants to control costs by paying more workers at the lower rate.

About 12 percent of Chrysler's 23,000 factory workers now are paid the lower wage, and the automaker plans to hire thousands more over the next four years as it retools factories to make new models.