If the United Auto Workers union agrees to profit-sharing instead of pay raises from Detroit's automakers, the companies will have to write bigger checks than they now, the union's president said Tuesday.
In an interview with The Associated Press, President Bob King said profit-sharing or other flexible methods of compensation will be discussed when the union formally begins contract talks with General Motors Co., Chrysler Group LLC and Ford Motor Co., next week.
Yet King, who has preached cooperation with the companies over confrontation, said that while he wants workers to be fairly compensated, he also wants deals that keep down the companies' fixed costs so they are competitive with foreign-based automakers.
"Our members deserve a fair share of the upside more than, in my opinion, what the current profit-sharing formula would pay out," King said. "If we're willing to take more flexible compensation instead of just putting in fixed costs, we should do better than we would have done" under the current profit-sharing plan, he said.
UAW workers at GM got $4,300 profit-sharing checks this year, while Ford paid out $5,000 and Chrysler paid $750.
The negotiations, the first since Chrysler and GM took government aid and emerged from Chapter 11 bankruptcy protection, will set the wages and benefits of 111,000 autoworkers nationwide. The current four-year contracts with the Detroit Three expire on Sept. 14.
King also told The AP that workers somehow must be protected against inflation. In 2009, they gave up cost-of-living pay raises as all three companies were headed toward financial ruin. Ford managed to stay afloat without government aid and now is prospering. All three companies made money last quarter, when even struggling Chrysler posted a net profit.
The companies say they're making money in part because of lower labor costs that came from union concessions made in 2007 and 2009, and they will want to keep those costs low. GM CEO Dan Akerson, for instance, has said the company favors profit-sharing over annual pay raises because raises can increase costs and leave the company vulnerable during economic downturns.
The companies may even try to cut the costs, but King said the union won't agree to more concessions.
"We have said very strongly and very consistently that there's no justification for further concessions," he told The AP. "There's got to be a program that's viable, that allows our members their fair share of the upside."
Also as part of the 2009 concessions, the UAW agreed to let the companies pay newly hired workers around $14 per hour, about half the wages of a long-term UAW member. King said the union would like to improve their finances, but he would not say if the union would seek hourly pay raises for the workers.
"I'm focused on income," King said. "I think in today's world that's how you've got to think about it."
King said both sides could reach their goals with creative solutions, and said he's not thinking about picking a company to target for a strike. Under the deal to get government aid, the UAW cannot strike over wages at GM or Chrysler.
GM, Chrysler and Ford spokesmen declined to comment on King's statements.