DETROIT - After months of talks, the UAW has blessed the Chrysler group's planned sale of its two Huntsville, Ala., electronics factories to Siemens VDO Automotive AG.
Siemens VDO and Chrysler announced the deal Monday.
Huntsville expands Siemens VDO's product lineup with radios, instrument clusters, car body controllers and powertrain controllers.
The German electronics giant will gain $1 billion in annual sales, solidifying its position as the world's third-largest supplier of auto electronics. Siemens VDO also gains a major production foothold in the South, positioning itself to win business with Japanese and German automakers.
The sale also is a milestone for the Chrysler group, which has sold or closed five other industrial properties and has two more to sell.
In the joint Chrysler-Siemens VDO statement scheduled to be released today, Chrysler group CEO Dieter Zetsche said the deal allows the automaker to "continue focusing on our core business."
Last September, the UAW agreed to lift its ban on the sale of Huntsville and other parts factories. But negotiations between Siemens VDO and the union proved thorny. Neither side is talking about the contract issues that delayed Huntsville's sale.
But it seems likely that job security for the plants' 2,000 hourly workers was a central issue. UAW Region 8 Director Gary Casteel was quoted in the Chrysler-Siemens VDO statement as saying that the deal will ensure the workers long-term employment.
The UAW had no additional comment late last week.
Equally important, the deal would allow the UAW to protect Huntsville as a unionized stronghold in the Deep South. The union hopes to use Huntsville as a bridgehead to organize nonunion plants in the region.
Wages were another likely hot-button issue in UAW-Siemens VDO negotiations. Last year, Siemens VDO closely monitored Chrysler's sale of its New Castle (Ind.) Machining factory to Metaldyne Corp. The deal resulted in lower wages and benefits for unionized employees.
Siemens VDO presumably demanded two-tier wages for Huntsville's employees. It is not yet known what the union conceded.
The Huntsville deal caps more than a decade of acquisitions for Siemens VDO, which is based in Regensburg, Germany. Global sales have risen from $2 billion in 1994 to an expected $10.6 billion with this purchase, Siemens VDO says.
According to Deutsche Bank, only Robert Bosch GmbH and Delphi Corp. are larger in global automotive electronics sales.
The Siemens VDO move further consolidates the world's auto electronics business. There were 27 major auto electronics suppliers two decades ago. Now there are just nine, according to Siemens VDO.
Siemens VDO CEO Wolfgang Dehen said in the statement: "This acquisition elevates Siemens VDO's NAFTA business to a new level in electronics leadership."