Bailouts and bankruptcies behind them, Detroit’s automakers are now facing talks on new national contracts. The United Auto Workers kicked off the ceremonial opening of negotiations at Chrysler today, and will do the same at Ford and General Motors later this week.
UAW President Bob King says he doesn’t want to put any of the companies at a disadvantage.
“We want them to be competing on the basis of product, design and quality,” he said, according to Bloomberg.
Contracts expire in September. During the last major negotiations, in 2007, the auto industry was on the verge of a devastating decline in sales that would lead to federally sponsored restructurings at Chrysler and G.M., part of an industry bailout that cost $82 billion.
This time, the Detroit automakers are each profitable again. G.M., Ford and Chrysler combined to earn more than $6 billion in the first quarter. Last year, GM earned $6.17 billion. Ford had net income of $6.56 billion in 2010, the most in 11 years. (Chrysler, now part of Fiat, did not report 2010 results.)
But competitive pressures remain.
The union wants workers, who granted concessions since the last contract that are worth up to $30,000 apiece, to share in some of those profits, in the form of pay increases for entry level workers, and more profit sharing money for all workers. They also want the car makers to re-open some of the factories closed when the auto industry was at its deepest point.
The companies note that entry level workers — called two-tiers — earn about the same wages as their counterparts at non-union, foreign-owned factories in the Midwest and South. They want UAW members to pay a greater part of their health care expense, which still costs them hundreds of millions of dollars a year, even though responsibility for administering health care programs has been shifted to outside trusts.
These negotiations have a different tone than talks in the past. G.M. and Chrysler workers gave up the right to strike as part of the bailout agreements, and also agreed to binding arbitration. There are no such restrictions at Ford, leading some experts to predict the UAW may focus its efforts there, figuring the ability to strike gives the union more influence.
The auto industry’s presence has shrunk dramatically in recent decades. There are only 112,000 UAW represented hourly workers left at the three Detroit companies, down from a peak of about 1 million hourly workers in 1978. But because the companies have closed so many out lying plants, its factories now are concentrated mainly in the Midwest.
I talked to Robin Young of Here and Now about the contract negotiations.
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