UAW, Ford to begin high-level talks on labor deal

Published September 26, 2011

| Reuters

DETROIT (Reuters) - The United Auto Workers union and Ford Motor Co <F.N> will begin "high-level financial discussions" on Monday in an effort to reach a new labor deal that workers expect to be richer than one with General Motors Co <GM.N>.

On Saturday, UAW Vice President Jimmy Settles, the lead negotiator with Ford, met with his administrative assistants to prioritize his agenda in preparation for this week's meetings with Ford executives, the UAW said in a memo.

Settles and Ford have agreed to hold "very long" negotiating sessions this week, and once a deal is close those meetings should "last around the clock," the union said.

Although the UAW said there is no indication a strike against Ford will be necessary, Settles said all local union presidents should begin preparing for one in case a deal cannot be reached.

Teams of negotiators for the union and Ford, the only U.S. automaker to avoid bankruptcy, have been meeting for about two months. Financial issues typically are addressed in the final stages of negotiations.

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 <FIA.MI>-controlled automaker until October 19.

Meanwhile, UAW-represented workers have begun voting on a tentative four-year deal reached a week ago with GM. Union officials hope to wrap up that voting by Thursday.

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 Detroit labor talks will set wages and benefits for about 112,500 unionized autoworkers and establish 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 uncertain 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. Also, GM and Chrysler UAW workers gave up the right to strike for these contract negotiations as part of the government bailout.

Chrysler Chief Executive Sergio Marchionne and UAW President Bob King met on Friday and "productive discussions are ongoing," the union and the automaker said. The union said those talks continue.

One issue Chrysler and the UAW could not agree on was the number of workers paid the entry-level wage of about $15 an hour, about half the traditional rate, said a source familiar with the talks who asked not to be identified. The automaker wants no limits on the number of such workers it can use, while the union wants a cap.

Chrysler has sought a cost-neutral contract, which would require wage increases for entry-level workers to be offset by higher worker healthcare contributions or in other areas.

Healthcare costs, then, would be one area in which a Chrysler agreement would differ from the tentative GM deal.

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

An unsettled grievance 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 King has called "morally wrong."

The union has made job retention and expansion a top goal in the talks. The UAW may seek to have Ford shift work from Mexico to U.S. plants, something the union touted in its deal with GM. Ford builds the Fusion mid-sized sedan and Fiesta small car at plants in Mexico, where it also has an engine plant.

(Reporting by Ben Klayman in Detroit; editing by John Wallace)

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