Carmakers talk of new labour deal

Detroit's carmakers will sit down in the coming days to negotiate a new labour contract with the United Auto Workers union, in talks that will be more closely watched than usual by their foreign-owned US rivals. The talks coincide with a renewed thrust by the union in its long — but so far unsuccessful — drive to gain a foothold in the foreign-owned plants as a way of bolstering its shrunken membership. The prime objective for the three Detroit companies — General Motors, Ford Motor and Chrysler — is to preserve and even deepen the cuts in labour costs forced on the union during the 2008-09 industry crisis . At the same time, the Detroit carmakers are quietly cheering on the UAW's organising efforts at the "transplants", on the grounds that success will help keep their labour costs competitive with Toyota, Honda and Nissan, among others. Article continues below As one Detroit negotiator puts it: the 2009 taxpayer-funded bail-out of GM and Chrysler "wasn't us [the carmakers] against them [the union]. It's us collectively against the Japanese three". If North American labour costs are going to rise, he added, "all boats must rise together". Another executive explained: "We died once. We don't want to die again." Concessions made by the UAW during the last round of contract talks in 2007 and as part of the 2009 bail-out have gone a long way towards levelling the playing field. Chrysler's labour costs, including wages and benefits, have dropped from an average of $75.86 (Dh278.64) an hour in 2006 to slightly more than $50 now, putting it on a par with the transplants. Costs at GM and Ford are about 15 per cent higher, partly because they employ a higher proportion of skilled workers. One of GM's goals in the coming talks is to improve efficiency by allowing production workers to handle some tasks now reserved for skilled trades. The union's top priority is to give its 110,000 members at the three companies a bigger and more secure stake in future profits. Workers at Ford each received a profit-sharing bonus of $5,000 this year. GM paid out $4,300 per worker and Chrysler $750. Bob King, UAW president, told Associated Press earlier this week: "Our members deserve a fair share of the upside more than, in my opinion, what the current profit-sharing formula would pay out". Arthur Schwartz, a former GM labour negotiator and now a consultant, said that "the union are in a tough position because they've got to get something for their members while at the same time maintain the competitiveness of the companies". In the end however, the employers have the upper hand. The UAW signed a no-strike agreement as part of the 2009 bail-outs. Any unresolved issues when the existing GM and Chrysler contracts expire on September 14 will be referred to arbitration.