AppId is over the quota
AppId is over the quota
By Bill Visnic September 15, 2011
Current four-year labor contracts with the United Auto Workers union expired as Thursday began, but each of the Detroit Three automakers and the UAW agreed to extend the contracts as the union and Ford Motor Co., General Motors Co. and the Chrysler Group LLC separately negotiate a new agreement. The UAW said it planned to make a new contract with GM the “pattern”, and seek to craft similar agreements at Ford and Chrysler. But as the Sept. 14 deadline passed, the union had not finalized an agreement. In a statement today, GM said only that the company and the UAW “have agreed to extend discussions as they work to craft an agreement that meets the needs of employees and the company.”
Negotiations with GM would resume today, the company said, but there has been little detail from any of the parties on how far the talks have progressed. At the Frankfurt auto show on Wednesday, Chrysler CEO Sergio Marchionne told reporters the company is not near reaching an agreement with the UAW, which represents a combined 113,000 workers at the three Detroit-based automakers. Ford also was offering no details about the progress of its contract negotiations, although a union official indicated an agreement with Ford would not be the one used as the pattern for contracts with GM and Chrysler.
One likely issue is whether the union can win a hike in the so-called “second-tier” wage structure it agreed to in the current work rules. The structure allows the companies to pay newly-hired workers a significantly lower starting wage – about $14 per hour – than is earned by veteran UAW members. The two-tier wage structure was an unprecedented accommodation to help the struggling Detroit automakers at a time when all three were in financial distress, but the union is believed to be seeking an increase in the entry-tier wage, particularly now that the automakers have firmed their balance sheets and drastically restructured their operations.
Reports indicate, however, that the union also is seeking large per-worker bonuses for signing the new contract, a signal that, for now, the UAW might be willing to forestall an increase in hourly wages to allow the automakers more time to recover. Reports have indicated the UAW may be seeking bonuses of as much as $10,000 per worker and a system of performance-based incentives that structure bonuses in accordance with the company’s profitability. The government-negotiated bankruptcies of GM and Chrysler included a provision that prevents the UAW from striking the two automakers if a labor agreement can’t be reached. If the UAW, GM and Chrysler cannot ratify a new four-year labor contract, the parties must accept a contract formed in binding arbitration, negating a UAW-directed work stoppage, the traditional option if the union and an automaker cannot agree on terms of a new contract.
Bill Visnic: is an Edmunds' AutoObserver.com Senior Editor.
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