Contracts covering United Auto Workers members at the Detroit auto companies expire tonight and the pace is stepping up.
Sergio Marchionne, the Fiat chief executive who also oversees Chrysler, flew back to the United States from Germany, skipping a meeting with Chancellor Angela Merkel, according to the Detroit News.
UAW President Bob King says he’s confident a deal can be reached by the deadline, although it’s not unusual for talks to go on longer.
There can’t be strikes at General Motors and Chrysler, due to agreements reached when the companies received federal bailouts. And while the UAW could walk out at Ford, the cordial relationship there makes a strike highly unlikely.
So, what are the big issues at stake in these talks? I talked to WBEZ’s Venture program this week about the negotiations.
Essentially, there are two big issues of importance to the two sides.
One is the future of newly hired workers, who are called two-tiers within the industry. They earn sharply lower wages than veteran workers, even though they work on the same assembly line. Our Kate Davidson profiled two-tiers last year.
These workers earn about $14 an hour, versus $28 for workers who were hired a few years ago. The UAW wants that base wage to go up. The companies, however, say they need to stay competitive with non-union auto workers in the United States, and beyond, where wages as low or even lower.
The other issue is health care. Before 2007, UAW members paid very little for health care coverage. Their benefits, while not as rich now, are still better than those received by workers at many other companies across the United States. However, these benefits cost the car companies hundreds of millions of dollars a year, and they are determined to save money.
The UAW’s ranks at the auto companies are vastly smaller than they once were. About 120,000 people work on assembly lines at the three companies, versus nearly 1 million at the peak in 1978. And, the role of the auto industry has diminished as part of the regional economy, according to the Federal Reserve.
But there are still auto plants in Detroit and Chicago, as well as other parts of Michigan, Indiana, and Ohio, where people are watching closely to see what happens with these negotiations.
Are you paying attention to the talks? Predictions on the outcome?