DETROIT (WWJ/AP) – Negotiations between the United Auto Workers Union and two of the three domestic car makers continued past the midnight contract expiration.
Unlike previous years, this wasn’t a “strike deadline”, because the union agreed two years ago that it wouldn’t strike GM or Chrysler in these negotiations. Talks with Ford, which doesn’t have a no-strike guarantee have slowed while the union focuses on the other two automakers.
This is not an indication of any problems with the negotiations, which are very complex. It’s not unusual for the talks to go hours, or even days past the deadline.
Talks are going better at GM than at Chrysler, where CEO Sergio Marchionne has sent a strongly worded letter to UAW President Bob King, blaming King for delaying the talks by not coming to the table on Wednesday. No comment on that from the UAW.
General Motors appears to be taking the lead in the negotiations, and will likely set a pattern. Various reports have a likely deal including bonuses for workers and enhanced profit sharing. But workers are expected to have to pay more for their health care.
Joe Ashton, the UAW’s vice president in charge of the GM negotiations, told local union officials Tuesday night in a note that bargainers have made “much progress” in talks with the company. GM has taken the lead on the negotiations and its agreement may be used to set the pattern for the other two companies.
The contract talks will determine wages and benefits for 111,000 union workers at the auto makers, and they also set the bar for wages at auto parts companies, U.S. factories run by foreign automakers and other manufacturers, which employ hundreds of thousands more. The contract talks are the first since GM and Chrysler needed government aid to make it through bankruptcy protection in 2009.
Ashton wrote that “difficult restrictions” have been placed on the union and company as a result of the bailout. GM nearly ran out of cash and needed $49.5 billion from the government to survive, but it’s been making billions in the last two years because its debt and costs were lowered in bankruptcy and its new products have been selling well.
To get the government funding for GM, the union had to agree not to strike over wages at GM and Chrysler, which also needed government help. Also, unresolved issues can be taken to binding arbitration, and the union’s new contracts must keep the companies’ labor costs competitive with Asian automakers such as Toyota Motor Corp. and Honda Motor Co.
“As you know, several difficult conditions were agreed to in order to obtain financing during the bankruptcy,” Ashton wrote in the note to local union officials. “We are confident that we can reach an agreement that will meet many of the goals we set at the beginning of negotiations.”
The union has been seeking bigger profit-sharing checks instead of pay raises, higher pay for entry level workers who make $14 to $16 per hour, signing bonuses and guarantees of new jobs as auto sales recover. Ford and Chrysler want to cut their labor costs to get them closer to Honda and Toyota, while Chrysler wants to hold its costs steady.
The Associated Press and WWJ AutoBeat Reporter Jeff Gilbert contributed to this story.