Automakers Continue UAW Talks

Contract negotiations between the United Auto Workers and Detroit automakers continued Sunday as the sides worked to reach agreements before pacts expire in a week.

Spokesmen for General Motors Corp. and DaimlerChrysler’s Chrysler Group said bargainers met through the weekend. They declined to discuss details.

Ford Motor Co., GM and Chrysler are seeking contracts with more flexibility in areas such as compensation and plant work rules that would allow them to better compete with foreign automakers.

The current contracts, negotiated in 1999 during better times for the industry, include 3% annual pay increases, a ban on plant closings and nearly free health care.

In a recent research report, Morgan Stanley analyst Stephen Girsky said the auto companies would like to have more flexibility on plant closings before agreeing to further moratoriums.

Girsky estimated the Big Three would need to shut as many as 10 North American plants “to move supply-demand into better balance.”

So far this year, U.S. sales at GM, Ford and Chrysler are down nearly 5% from a year earlier. At the same time, Asian automakers, which continue to add new models and manufacturing capacity in the domestic market, have seen volume rise 3%. European brands are up 1%.

The UAW and automakers have been negotiating since mid-July on issues such as wages, jobs, health care and pensions that affect 300,000 workers and nearly half a million retirees and their spouses.

Typically, the union reaches a deal with one automaker and the others follow the resulting terms. No company has been named to lead negotiations.

The contracts expire midnight Sept. 14.