Few Snags Seen as Auto Makers, UAW Begin Talks
In the midst of revved-up sales and profits, the nation’s domestic auto makers and the United Auto Workers opened their triennial labor contract talks Monday with expectations high that a deal is likely without a disruptive strike.
Sobered by last year’s 54-day strike against General Motors Corp., which cost GM $2.2 billion and wiped out workers’ profit sharing, the two sides are not rattling their sabers or raising their rhetoric as in the past.
Rather, GM, Ford Motor Co. and DaimlerChrysler publicly talk about being partners dedicated to finding creative solutions to satisfy the union’s desire to protect jobs and benefits while meeting the auto makers’ efficiency needs.
There are tough issues to be tackled before the contract expires Sept. 14, but labor and management in Detroit are trying to steer clear of major confrontations that could upset the industry’s prolonged boom.
“There is absolutely no chance of a strike,” said Sean McAlinden, labor economist for the Office of Automotive Transportation Studies at the University of Michigan.
The negotiations officially began with a ceremonial handshake between UAW President Stephen P. Yokich and Ford Vice Chairman Peter J. Pestillo. The union, which represents more than 350,000 auto assembly workers, will kick off talks with DaimlerChrysler today and GM on Wednesday.
With job security its main contract focus, the UAW seeks expanded employment guarantees, limits on outsourcing to nonunion contractors and reduced use of overtime.
It opposes so-called modular assembly plants that require fewer workers and it further seeks the auto makers’ assistance in organizing nonunion suppliers. The UAW represents 80% of U.S. assembly workers but only 10% of auto parts workers not employed by GM, Ford and DaimlerChrysler.
The union also wants higher wages and improved pensions for early retirements and maintenance of existing medical benefits without co-payments.
The companies are seeking to introduce new manufacturing technologies that require fewer, more flexible workers, and they want to shed inefficient auto parts businesses to lower costs. They may also propose a four- to six-year contract in an effort to lock in labor costs.
“I don’t see any ‘strikeable’ issue that would prompt the union to bring the industry to its knees,” said Dale Brickner, a retired labor professor at Michigan State University. “But there are some possible flash points.”
The UAW will hold concurrent negotiations with the three companies in the next three months. In early September, it will choose one auto maker for intensified bargaining to hammer out a “flexible pattern contract” that will form the economic framework for national agreements with the other two companies.
Each auto maker says it prefers to be the lead company to negotiate a deal that best suits its needs. Ford, which has the best relations with the union, was the lead company in 1993 and 1996 and is considered the front-runner this year with GM. DaimlerChrysler is seen as an unlikely choice because its recent merger gives it unique issues.
Among key contract issues is the spinoff of parts operations. GM recently spun off its parts subsidiary to form Delphi Automotive Systems Corp., now the world’s largest independent auto supplier. The UAW strongly opposed the move, fearing that it will lead to reduced pension benefits and lower wages for Delphi’s employees. Ford is contemplating a similar move with its Visteon parts unit.
Another area of contention is modular assembly, which uses lower-cost suppliers to build large component systems in lieu of having them put together by UAW workers on the line.
