UAW talks with Ford shifting into higher gear

Reuters News
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Posted: Sep 22, 2011 9:23 PM
UAW talks with Ford shifting into higher gear

By Deepa Seetharaman and David Bailey

DETROIT (Reuters) - United Auto Workers and Ford Motor Co officials set a framework for the final stages of the negotiations toward a new labor contract on Thursday, the union said.

"Vice President Jimmy Settles has indicated that high-level financial discussions with the company are expected to begin Monday," the union said in a memo. Financial issues typically are addressed in the final stages of negotiations.

Settles is the lead negotiator for the UAW with Ford.

Thursday was the first day of negotiations between the UAW and Ford with the automaker as the main focus of bargaining, though the sides have been meeting for almost two months.

"Both our negotiators and the company have submitted their final resolutions," the union said in a memo updating workers on the talks with Ford, the only U.S. automaker that avoided bankruptcy.

The union began an intense focus on Ford a day after the UAW, failing to finalize a deal with Chrysler Group LLC, extended its contract with the Fiat-controlled automaker until October 19.

Meanwhile, UAW-represented workers began to vote on Thursday on a tentative four-year deal reached late last week with General Motors Co, including meetings at locals in Flint, Michigan, and Bowling Green, Kentucky.

Union officials hope to wrap up ratification votes on the GM deal by September 29 and a four-week extension at Chrysler has reduced the urgency for reaching agreements.

Union leaders on Tuesday released highlights touting jobs retained and added, and bonus payments in the proposed GM deal. On Thursday, dissident union group autoworkercaravan.org said the freeze in cost-of-living increases amounted to an annual pay cut over the next four years.

The Detroit labor talks will set wages and benefits for about 112,500 unionized autoworkers and set a benchmark for wages at auto parts suppliers and nonunion plants run by Asian and German automakers.

New four-year contracts for GM and Chrysler workers would be the first since those two companies were bailed out by the Obama administration in 2009. UAW-represented autoworkers have gone without a base pay increase since 2003.

The talks with Ford, playing out at its Dearborn, Michigan, headquarters also known as "the Glass House," will be patterned roughly after the deal that covers 48,500 GM workers, which is expected to be ratified late next week.

The GM contract would keep or create more than 6,000 factory jobs, raise wages for entry-level workers and guarantee all workers bonuses of at least $11,500 over four years.

The uncertainty around the outlook for auto sales in 2012 and the risk of a renewed U.S. recession have made the Detroit automakers reluctant to offer traditional wage increases.

However, Ford's roughly 41,000 UAW-represented workers have retained the right to strike and have the highest expectations for wages and bonuses because of the automaker's performance. Ford has not had a UAW strike since 1976.

An unsettled grievance also could complicate talks. The union has said Ford broke a pledge to treat workers equally when it restored raises and 401(k) matches for white-collar workers without making a similar payout to factory workers.

There is also simmering resentment among UAW workers over Ford Chief Executive Alan Mulally's compensation last year of $26.5 million, which UAW President Bob King called "morally wrong."

The UAW also may seek to have Ford shift work from Mexico to U.S. plants, something it touted in its deal with GM. Ford builds the Fusion mid-sized sedan and Fiesta small car in Mexico. Ford also has an engine plant in Mexico.

The shift to Ford from Chrysler caught analysts and even some UAW officials by surprise as the union strategy had been to close quick deals at GM and Chrysler before turning to Ford.

However, talks with Chrysler became strained last week when the company's CEO, Sergio Marchionne, scolded King for failing to meet a commitment to reach a new contract by the expiration of the former pact on September 14.

In talks this week, Chrysler negotiators had hammered home the message that the GM deal was too rich for Chrysler to match, a person with knowledge of the talks previously said.

In addition, Chrysler pressed the UAW for some assurance it would not try to push fixed costs higher even after 2015, the person said.

(Reporting by Ben Klayman and David Bailey in Detroit; Editing by Maureen Bavdek, Matthew Lewis, Carol Bishopric, Phil Berlowitz)