Just last month, the United Auto Workers (UAW) struck General Motors (GM) and settled two days later, despite the union’s declaring at the outset of the strike that the two sides were far apart on fundamental issues. Yesterday, union leaders sent Chrysler’s 45,000 workers to the picket lines. Six hours later, the strike ended.

“Such short national walkouts are an unusual tactic in the auto industry,” reports The New York Times. “Historically, strikes have lasted for months, inflicting deep financial pain on both workers and their companies. Both sides could dig in, when the industry was relatively healthy.”

Now, though, over at Cerberus Capital Management’s offices, top management probably fretted about how they could possibly compete with offshore automakers whose manufacturing costs are far lower unless the UAW would willingly lower its expectations regarding job security, salaries and benefits. Given the industry’s financial woes in the United States, neither side can afford a drawn-out battle, thus the six-hour turnaround between walkout and agreement.

In last month’s GM settlement, both sides made concessions and claimed victory. For example, the UAW won job guarantees for its members while GM was able to offload its enormous health care liability into a separate trust. That deal, officially ratified Wednesday by rank-and-file members, ended a two-day strike against GM. Although the UAW and GM found common ground in a way to face high health care costs, the union and Cerberus Capital Management had no prior relationship. The private equity firm bought the company this year and vowed to make it operate more flexibly.

As is tradition with UAW negotiations, details of the tentative deal were not immediately made public, though it was described as “sticking with the pattern set by the landmark agreement” reached Sept. 26 between the union and GM, according to The Detroit Free Press.

The New York Times notes of yesterday’s short walkout:

The likely duration of the strike at Chrysler was particularly uncertain because of its new owner: Cerberus Capital Management, the private equity firm that bought the company this year and vowed to make it operate more flexibly.

Whereas the final UAW-GM contract includes the formation of a Voluntary Employees’ Beneficiary Association (VEBA), requiring GM to make a one-time $35 billion investment in the fund to finance retiree health-care benefits, talks between the union and Chrysler reportedly stalled over the funding of a similar fund, according to Ward’s Auto World.

For Chrysler, the length of the strike likely mattered less than it did for union workers. Chrysler has “at least three months’ worth of most vehicles in stock and has shut half of its United States assembly plants this week to let those inventories thin out,” reports another New York Times report. The automaker’s popular minivans can still be made in Canada.

The 45,000 strikers at Chrysler, however, only get $200 a week in strike pay from the UAW, so they had probably hoped a strike wouldn’t occur. The strikers learned that Chrysler planned to cut up to 1,500 salaried and contract positions, indicating the company managers feel compelled to cut costs to compete.

“In what some saw as preparation for a possible strike, Chrysler confirmed last week that five of its 10 U.S. assembly plants would be shut down, starting Oct. 9, for a total of eight weeks,” notes Ward’s Auto World.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, said to The Detroit Free Press that “Chrysler has had some real difficulty getting the union to go along. So I think they needed a little bit more drama in their situation.”

Considering the union’s strategic mini-strikes against Chrysler and GM, is a Ford strike next?

David R. Butcher contributed to this post.

Resources

Auto Union Workers Walk Out at Chrysler
by Micheline Maynard and Nick Bunkley
The New York Times, Oct. 10, 2007

UAW Launches Strike Against Chrysler
Ward’s Auto World, Oct. 10, 2007

2 Deals, 1 to Go: Chrysler, UAW Settle After Short Walkout
by Tim Higgins
The Detroit Free Press, Oct. 11, 2007

A 6-Hour Strike Against Chrysler
by Micheline Maynard
The New York Times, Oct. 11, 2007

Chrysler Workers Strike as Talks Fail to Yield Accord (Update3)
by Bill Koenig and John Lippert
Bloomberg News, Oct. 10, 2007

The UAW’s Striking Ways
by Keith Naughton
Newsweek, Oct. 10, 2007

For Chrysler Workers, Worries about ‘Strip and Flip’
by Mike Spector
The Wall St. Journal, Oct. 10, 2007