After missing the deadline to finalize new agreement negotiations, the United Auto Workers union extended contracts with General Motors and Chrysler Group. Contracts with Ford were prolonged earlier in the week and are still being defined.
UAW leaders said to the media: “We are hopeful that an agreement can be reached soon. While we have made significant progress, we have not been able to secure a new agreement that we would recommend for ratification.”
The contracts under debate cover a combined 111,000 US factory workers at GM, Chrysler and Ford. Workers could have gone on strike due to the delay in contract discussions, but in the 2009 government bailout documents it states that GM and Chrysler workers agree not to strike over wage disputes.
The UAW’s vice-president in charge of the GM negotiations, Joe Ashton, told local union officials that progress is being made. GM has taken the helm of the negotiations and its agreement may be used as the lighthouse for Detroit’s other two automakers in their individual bargaining discussions.
Turning a New Page
Chrysler CEO Sergio Marchionne agreed to a week-long extension for the Chrysler workers' union contract, but a new deadline has not been set by the UAW. Marchionne said that he and UAW President Bob King agreed to meet a week earlier to discuss details of the contract, including wages and benefits, before the deadline and that not meeting the deadline harms Chrysler’s employees.
“You and I failed them today,” Marchionne wrote. “We did not accomplish what leaders who have been tasked with the turning of a new page for this industry should have done.”
These new contract discussions mark the first in the two years since the government bailed out the automotive industry, and the aim is to set the bar for wages at auto parts companies, foreign automakers’ US factories and other manufacturers.
As a result of the bailout, union contracts must keep competitive labor costs with Asia-based automakers, like Toyota and Honda. Union workers are interested in profit-sharing cheques over pay increases, higher pay for lower-income workers, signing bonuses and guarantees of new jobs as the auto industry improves.
As soon as the contract terms are determined, union workers will vote.
Key Statistics – US Automotive Industry Employment (Source: UAW; August 2011)
- Official unemployment rate – 9.1%; “Real” unemployment rate – 16.2%
- Number unemployed – 14 million; Job growth in August - 0
- Number unemployed more than 6 months – 6 million
- Average duration of unemployment – 40.3 weeks
- Jobs needed for full employment – 12.4 million