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Chrysler begins union pay talks Chrysler begins union pay talks
(about 5 hours later)
Chrysler has begun formal pay talks with unions, with both sides aware the carmaker must further cut costs if it is to survive in its current form.Chrysler has begun formal pay talks with unions, with both sides aware the carmaker must further cut costs if it is to survive in its current form.
The US giant is on the verge of being sold by its German parent company to US private equity firm Cerberus Capital.The US giant is on the verge of being sold by its German parent company to US private equity firm Cerberus Capital.
Chrysler is seeking new concessions on pay and conditions to narrow the efficiency gap with Japanese carmakers.Chrysler is seeking new concessions on pay and conditions to narrow the efficiency gap with Japanese carmakers.
In recent years, US names Chrysler, GM and Ford have lost sales to Toyota and Honda and made spectacular losses.In recent years, US names Chrysler, GM and Ford have lost sales to Toyota and Honda and made spectacular losses.
Summer of talksSummer of talks
Progress made between the two sides will set the tone for a summer of crucial wage negotiations across Detroit, home of the US car industry.Progress made between the two sides will set the tone for a summer of crucial wage negotiations across Detroit, home of the US car industry.
Reducing the firm's cost base is essential to preserving jobs and maintaining existing levels of US production, Chrysler says.Reducing the firm's cost base is essential to preserving jobs and maintaining existing levels of US production, Chrysler says.
For its part, the United Auto Workers (UAW) has said it is not in "concessionary mode".For its part, the United Auto Workers (UAW) has said it is not in "concessionary mode".
Chrysler workers are facing uncertain times
However, in recent years the UAW has accepted unprecedented cuts in wages and benefits on behalf of its members at top carmakers.However, in recent years the UAW has accepted unprecedented cuts in wages and benefits on behalf of its members at top carmakers.
More than 80,000 jobs have been lost in the industry in the past two years, the bulk of them through voluntary retirement packages negotiated by unions.More than 80,000 jobs have been lost in the industry in the past two years, the bulk of them through voluntary retirement packages negotiated by unions.
About 26,000 UAW members work at Chrysler and, according to industry research, are paid on average $30 per hour more than their counterparts at Japanese firms.About 26,000 UAW members work at Chrysler and, according to industry research, are paid on average $30 per hour more than their counterparts at Japanese firms.
Chrysler chief executive Tom LaSorda said he was prepared to "re-examine every part" of the company's business model.
"Negotiations are all difficult," he said.
"This one is no exception."