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Date Posted: 18:17:45 10/12/03 Sun
Author: none
Subject: Contract Talks?

posted 9/3/03 5:43 AM


GM Proposes Wage Freeze, Higher Health Costs to UAW, People Say Aug. 30
(Bloomberg) -- General Motors Corp., the world's largest automaker, offered the
United Auto Workers union a contract that freezes wages, increases health
payments for workers and allows for job cuts to combat overseas competition, said
people familiar with the proposal.
The Detroit-based company, in talks to replace a contract that expires Sept.
14, presented proposals yesterday to keep pay at $26 an hour for four years,
raise the price workers pay for prescription drugs and possibly lower minimum
employment levels at factories, the people said. General Motors also endorsed
the right of workers at its suppliers to join the union, they said.
General Motors, Ford Motor Co. and DaimlerChrysler AG's Chrysler unit say
they need to control rising costs to halt market share losses to Toyota Motor
Corp. and Honda Motor Co. The automakers, and suppliers Delphi Corp. and Visteon
Corp., are renegotiating contracts for 291,510 UAW workers and half-a- million
retirees covering wages and health benefits.
``General Motors is not proposing big health care takeaways,'' which may make
the offer more acceptable to the union, said Dan Luria, an analyst at the
Michigan Manufacturing Technology Center in Plymouth, Michigan. ``It sounds to me
like many of its current jobs will be going to unionized suppliers.''
Ron Gettelfinger, the UAW president, has told subordinates he hopes to
complete most of the bargaining by Thursday, and to keep the negotiations proceeding
at the same pace at the three companies, the people said.
Market Share Declines
General Motors spokesman Tom Wickham and UAW spokesman Paul Krell declined to
comment on the offer. DaimlerChrysler spokesman Dan Bodene and Ford
spokeswoman Anne Marie Gattari declined to comment on whether their companies had made
initial contract offers.
The U.S. automaker's share of the market has dropped to 60 percent while
Asian companies such as Honda and Toyota control about a third, according to the
latest statistics.
In its offer, General Motors proposed freezing hourly wages through 2007,
plus paying three bonuses equal to 2 percent of workers' annual pay, the people
said. Each bonus would be worth about $1,066 assuming no overtime.
The automaker proposed doubling the $3-$5 workers pay for each drug
prescription now. Separately, General Motors proposed a continuation of its current
policy of not asking workers to pay part of their monthly health insurance
premium, the people said. When talks opened in July, Gettelfinger pledged to resist
higher out-of-pocket health costs.
Suppliers
General Motors endorsed the right of workers at its own factories and
suppliers to join unions. The company also proposed that the minimum employment
levels in its current contract be reduced to a lower, unspecified level in the next
few months, the people said.
Taken together, these proposals form the framework for intensified talks
during the next two weeks, said Luria, a former economist for the United Auto
Workers and author of three books on employment and industry.
General Motors' most important goal will be to reduce its minimum employment
level, perhaps after the union has agreed that money-losing factories will be
closed or sold, Luria said.
If factories are sold, the union will try to direct them to unionized
suppliers, while at the same time avoiding sharp cuts in wages and health care for
current General Motors workers, he said.
A possible model contract came in March, when the UAW agreed to let Ford stop
buying seat covers from a Visteon factory near Detroit, where workers are
paid $26 an hour. Ford will purchase the covers from Johnson Controls Inc., which
will pay workers who make the products $12 an hour.
In return, the union insisted on transfers or early retirements for 1,400
workers at the Chesterfield Township, Michigan, factory. Johnson Controls, after
a two-day strike last year, agreed not to oppose UAW organizing drives at 26
U.S. plants.
Pattern
In past years, Detroit automakers presented their initial offers just before
the UAW picked an individual company to seek its first, pattern-setting
contract. The union sought bargaining leverage by trying to pit the companies
against each other.
As of Friday, no formal agreements have been reached even on areas where the
union and General Motors collaborate, such as improving quality or factory
safety, the people said.
General Motors' retirees now earn $2,760 per month after 30 years of service.
The contract proposal would increase such payments by $200, the people said.
That's about half the increase contained in the contract signed by the
automaker in 1999.
Signing Bonus
The offer also included a signing bonus of $500, the people said. General
Motors' 1999 contract included a $1,350 bonus, in addition to four annual wage
increases equal to 3 percent of workers' base pay.
The company also proposed diverting 12 cents of the proposed cost-of-living
adjustments in the new contract to defray other costs. Such payments in the
current contract now total about $2 an hour.
The U.S. automakers' labor costs at their factories and at suppliers average
about $7,500 a vehicle, compared with $7,000 for Japanese rivals in the U.S.,
said Sean McAlinden, an analyst at the Center for Automotive Research in Ann
Arbor, Michigan.
Asian automakers share of the U.S. market rose to 32.5 percent in the first
seven months of this year, up from 24.9 percent five years ago. The U.S.
automakers' share has fallen to 60.5 percent from 70.2 percent in the same period.
Because almost all Japanese auto plants in North America are nonunion, the
share of union-built vehicles sold in the U.S. and Canada fell to 60 percent
from 82 percent in 1978, McAlinden said. UAW membership has dropped to 639,000
from 1.5 million in 1979.
Last Updated: August 30, 2003 13:31 EDT

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