Unique issues faced by each of Detroit’s ‘Big Three’ automakers could make an eventual agreement with General Motors “difficult” to use as a ‘pattern contract’ for similar pacts with Ford and Chrysler, a news agency said on Wednesday.
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General Motors and the United Auto Workers are scheduled to begin their fifth day of negotiations under hour-by-hour contract extensions later on Wednesday, the Associated Press (AP) said.
An AP report yesterday, citing anonymous sources, said a key sticking point that has lengthened the talks is that GM wants the UAW to take over responsibility for retiree health care costs using a company-funded trust while the union, in turn, wants job guarantees in exchange for taking on the costs of establishing and running a healthcare system.
That, incidentally, coincided with the unveiling, by Democratic presidential hopeful Hillary Clinton, of a complex new proposal to provide universal healthcare for all US citizens using a mix of employer-funded private providers with federal subsidies including tax breaks.
The Associated Press noted that all three US-based automakers are struggling with falling market share, high health care costs and too much factory capacity, and said that Ford may negotiate temporary wage cuts, for example, because its financial situation is the most dire, while Chrysler’s status as a private company could affect its contract.
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By GlobalDataBargainers for GM and the UAW negotiated from mid-morning until Tuesday evening before recessing for the night, GM spokesman Tom Wickham told the news agency, adding that the automaker is no longer releasing specific start and end times for the talks.
A UAW spokesman declined to comment at all to AP on the talks.
Meanwhile, “a person who was briefed on the talks” told the Associated Press that negotiators were optimistic but progress was slow as bargainers dealt with the details of a major health care agreement as well as changes to plant work rules.
According to AP, UAW president Ron Gettelfinger and his bargaining team on Monday night said – in a letter sent to local branch leaders – that they may establish a firm deadline if the talks don’t accelerate.
Because they have been extending their contract – which had been set to expire at midnight Friday – on an hour-by-hour basis, GM workers could strike at any time, the news agency noted.
“We have made progress in many areas of the discussions with GM but there are several major issues separating the parties that must be resolved,” said the letter, which was obtained by The Associated Press.
GM’s Wickham would not comment on the UAW letter, the news agency added.
A Standard & Poor’s senior industry analyst, Efraim Levy, told AP that pattern bargaining would work this year because, for the most part, the automakers are seeking the same things – they want to hold wages and make changes to things like the jobs bank, which currently pays workers even when they’re laid off.
GM is pushing hardest for the formation of a UAW-run trust fund that would take over the automakers’ estimated $US90bn in unfunded retiree health care costs, Levy reportedly said, adding that Ford and Chrysler also would benefit because the fund would allow them to take those obligations off their books and insulate them from health care cost inflation.
But David Cole, chairman of the Centre for Automotive Research, told the Associated Press the UAW probably would tailor agreements to individual automakers.
“The union will talk pattern, and the idea of that is solidarity, but in terms of real commonality I don’t think it really is true anymore,” Cole was quoted as saying. “We’re into new earth, and circumstances are very different between the companies.”
The news agency said Ford had already gone further than its US rivals in establishing new work rules at nearly all of its US plants, in a two-year effort that is saving the company $800m a year, while Chrysler’s new owner, Cerberus Capital Management, is focused on creating short-term cash rather than achieving long-term cash savings, and may not want to commit large amounts of cash to a health care fund.
Since Chrysler’s shares are no longer publicly traded, it also won’t be able to contribute stock to a health care trust fund, the Associated Press added.
