(AFP) – Sep 9, 2007
DETROIT, United States (AFP) — With less than a week to go before the current agreement expires, contract talks between the United Auto Workers and Detroit's Big Three automakers have slowed to a crawl with few signs of progress, sources told AFP.
The contracts covering more than 160,000 workers at General Motors Corp., Ford Motor Co. and Chrysler LLC expire at midnight Friday, September 14, though the talks could easily extend through the weekend without any threat to production.
The union, which has already made major concessions to help General Motors and Ford manage massive losses, is unwilling to accept major changes without guarantees that jobs both at the automakers and their suppliers will not be shipped overseas.
But many analysts say that significant change is needed in the new contracts if the Big Three, who have steadily lost market share, are going to be able to compete with their non-unionized foreign rivals.
With the deadline rapidly approaching, however, the automakers have been unable to present a united front in negotiations that require nearly identical contracts at all three companies, sources said.
"There isn't any real focus" in the negotiations at the moment, one union source told AFP.
Should talks fail, the union has the authority to call a strike, but this is considered highly unlikely.
But GM officials, in particular, are very concerned the union may elect to sit on its hands and basically force an indefinite day-to-day extension of the current contracts without any kind of strike threat, sources within the company told AFP.
The Big Three have collectively lost more than 25 billion dollars since the beginning of 2005 and the losses could have been even wider had the UAW not made a series of major health-care concessions at GM and Ford.
While union and company officials have vowed not to discuss the negotiations publicly, sources told AFP on condition of anonymity that the template for the talks so far has pointed towards a more traditional contract.
The one departure has been a discussion involving handing over the administration of costly health benefits to the union. While the union has been receptive, it wants broad assurances on a number of issues in exchange, particularly the sourcing of auto components and future production plans.
The union wants specific commitments in writing on keeping the production of engine components, transmissions and more fuel-efficient vehicles like hybrids in the United States, union sources said.
So far, GM and Ford have balked at providing any kind of guarantees, according to one UAW official familiar with talks at both companies.
UAW President Ron Gettelfinger alluded to the challenges of keeping car production in the United States on Thursday when he noted that none of the automakers now build subcompact cars domestically and that production of compact cars could move abroad if the government's fuel economy standards are changed.
The talks have been further complicated by infighting among the automakers, sources said. Instead of presenting a united front, the three companies are now pursuing widely different agendas on issues such as health care and retirement benefits, said one management source familiar with the talks.
"Why should we do something that's going to benefit one company," noted one Chrysler official, alluding to the intense pressure to change the retirement package in the contract.
GM has the most unionized retirees, more than 460,000, while Chrysler's retiree population is significantly smaller, at around 60,000.
Chrysler's new owner Cerberus Capital Management has also been very cool to the idea of parking a substantial amount of cash in a union-managed medical program under discussion.
Robert Nardelli, Chrysler's new chief executive, has said the company is instead focused on improving cash flow and turning under performing assets in ready cash.
Further complicating the talks is the growing threat of a recession.
Nardelli noted the auto industry's 2007 sales forecast has dropped from 17 million units to 16.2 million units.
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