September 8, 2011 in Business

Automakers, union still at odds on new contracts

Tom Krisher Associated Press
 

DETROIT – Ford, Chrysler and the United Auto Workers remain far apart in labor talks with just a week left before their contracts expire, two people briefed on the talks said Wednesday.

Negotiators for the two companies and the union have started serious talks on wages in the past few days, even though the union’s contracts with all three Detroit carmakers expire at 11:59 p.m. on Wednesday, the people said.

General Motors Co., on the other hand, has been talking pay with the union for about two weeks and is ahead of its crosstown rivals, said another person briefed on the talks. All three people asked not to be identified because the companies and union have agreed to keep negotiations private.

Contracts between the UAW and Detroit’s automakers are widely followed because they set the wages for about 111,000 autoworkers nationwide. They also set the bar for wages at auto parts companies and other manufacturers.

This year’s talks are the first since Chrysler and GM accepted government aid and emerged from bankruptcy protection in 2009. So far, talks between the union and the companies have been amicable, despite little movement on wages with Chrysler Group LLC and Ford Motor Co., two of the people said. The lack of progress raises the possibility that the contracts could be extended beyond next week’s deadline.

Union spokeswoman Michele Martin said talks with all three companies are making progress, but she declined to give details.

Both sides must reach agreements and union members must vote on the deals before new contracts can take effect.

UAW President Bob King has said he’d like to reach agreements with the companies before the contracts expire. But during the last round of contract talks in 2007, the union kept working under contract extensions until it reached deals with the companies in October and November.

King has said both sides are discussing profit sharing instead of the traditional hourly pay raises. Payments tied to profits would cut the companies’ fixed costs and give workers an interest in seeing carmakers make money. In exchange, King wants to raise the pay of entry level workers who now make $14 to $16 per hour, about half the pay of a longtime factory worker.

In a sign of how cooperative the UAW and carmakers have become, King has said he wants to keep the Detroit companies’ costs competitive with foreign-based companies. Ford and GM still have labor costs that are higher than foreign rivals with U.S. factories, while Chrysler’s costs are more competitive.

Ford and GM hope to cut their labor costs in the new contract, while Chrysler hopes to hold its costs steady. Both the union and companies are looking for ways to cut expenses beyond pay, such as wellness programs that would reduce health insurance premiums.

Talks between the union and companies began in late July.

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