Sunday Afternoon 9/14/02: UAW And Automakers Talk as Deadline Looms

DETROIT September 14, 2003; Justin Hyde writing for Reuters reported that talks between the United Auto Workers and Detroit's automakers and suppliers over a new labor contract ran down to the final hours on Sunday, as haggling over health-care costs threatened to delay a deal before a midnight deadline.

UAW President Ron Gettelfinger, running his first negotiations as head of the union, told reporters on Saturday "a lot of obstacles" remained to a new agreement with General Motors Corp., Ford Motor Co., DaimlerChrysler AG and suppliers Delphi Corp. and Visteon Corp., but that he still hoped to have an agreement with "at least one" of the companies by the deadline.

His comments rebutted weeks of chatter from company and union sources that the UAW and the automakers were driving to settle their contracts early as a signal of a new level of cooperation against inroads by foreign automakers running nonunion plants in the United States.

If negotiations spill over past the deadline, union sources have said the existing contract would likely be extended while talks continue. But the sources cautioned that strikes were possible if no progress was being made at the bargaining tables.

"We'll take an agreement any time we can get there," Gettelfinger said on Saturday.

An industry source who has monitored the negotiations closely told Reuters late on Saturday that the biggest obstacle was a demand from GM that UAW members' co-payments for prescription drugs rise sharply, to as much as $15 -- more than double the current rate -- on brand-name drugs.

GM spent $4.5 billion on health care for its workers last year, faces tens of billions of dollars in future health-care obligations to union workers, and has repeatedly cited health-care costs as a drag on its earnings.

But Gettelfinger has made health care the centerpiece of his public comments on the negotiations, vowing no concessions on the generous benefits UAW members receive. He told reporters on Saturday that the union was fighting to retain or even improve its medical benefits for its 302,500 active workers and 475,230 retirees and family members.

"LOW EXPECTATIONS"

Any changes GM received from the UAW would likely also be requested by Ford and Chrysler, delaying their deals as well. But the industry source said investors did not see GM winning much.

"Wall Street has very low expectations of GM's backbone on this," the source said.

In his comments on Saturday, Gettelfinger said for the first time that he had selected a "lead company" in the talks, but he did not identify the firm. Company representatives declined to comment on the negotiations on Sunday.

The union's traditional practice is to choose just one company for intensified negotiations ahead of the deadline. A deal with the "target company" would then be used as a pattern for further negotiations with the other automakers.

But unlike 1999, when the current four-year agreement was negotiated, Detroit's Big Three are struggling to make profits, with each making unique demands on the UAW. While GM wants to reduce retiree costs, Ford wants to close two assembly plants and two parts plants. DaimlerChrysler is believed to be asking for permission to sell off some of its parts plants and make its factories more competitive.

For its part, the UAW wants to stem a decline in membership that has reduced its autoworker roles by half since 1979. That's paralleled a drop in market share for the Big Three, which hit an all-time low in August of 57.9 percent.

(Additional reporting by Tom Brown)