Automakers, UAW to Meet Through Weekend

DETROIT September 6, 2003; John Porretto writing for the AP reported that bargainers for the United Auto Workers and the Big Three automakers met Saturday and were expected to work through the weekend to reach agreements before their current labor pacts expire Sept. 14.

The sides have resolved some major issues, and a source close to the talks said agreements could be reached during the weekend meetings. The UAW and automakers have declined to discuss the progress of talks.

Jeff Washington, president of UAW Local 900 and secretary of the UAW-Ford negotiating committee, said Saturday in a recorded telephone message for workers that the sides had held more than 300 meetings since mid-July.

"We're pleased to report the UAW bargaining team is making steady progress, working extended hours to achieve a contract that best addresses our members' needs in these difficult times, and positions Ford to win back market share and return to profitability," Washington said.

Ford, which lost $6.4 billion in the past two years, is in the midst of turnaround bid that includes extensive cost-cutting and the introduction of several new vehicles. For the first six months of 2003, Ford earned $1.3 billion, but its U.S. market share through August was 19.4 percent, down from 20.1 percent a year ago.

Ford, General Motors Corp. and DaimlerChrysler AG's Chrysler Group 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.

In a recent research report, Morgan Stanley analyst Stephen Girsky said the biggest labor cost difference between the Big Three and foreign automakers with U.S. plants is not active wages and benefits but retiree benefits -- so-called legacy costs.

"The UAW generally understands that the legacy cost gap exists," Girsky said. "They just believe it's more easily solved by a combination of public policy and/or building better products at the Big Three."

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

The current contracts, negotiated in 1999 during better times for the industry, included 3 percent annual pay hikes, a ban on plant closings and nearly cost-free health care.

Because the U.S. market share for domestic automakers is at an all-time low, and foreign automakers continue to expand domestic lineups and capacity, most observers say the probability of a strike is low.

Typically, the union reaches a deal with one automaker and the others follow the resulting contract terms.

UAW President Ron Gettelfinger has been conferring in recent days with his lieutenants on the status of talks with the Big Three as well as suppliers Delphi Corp. and Visteon Corp. He's yet to publicly announce a company to lead negotiations.

DaimlerChrysler AG, http://www.daimlerchrysler.com

Ford Motor Co., http://www.ford.com/

General Motors Corp., http://www.gm.com/

United Auto Workers, http://www.uaw.org/