UAW, automakers continue talks as deadline nears

By DEE-ANN DURBIN and TOM KRISHER | September 14, 2011 | 6:00 PM EDT

DETROIT (AP) — Negotiators with the United Auto Workers union, General Motors Co. and Chrysler Group LLC were bargaining into the evening Wednesday as a deadline approached to reach new contracts.

Chrysler CEO Sergio Marchionne flew back from Europe to take part in the talks Wednesday, signaling a deal could be close. The union's top bargainer with General Motors reported that "much progress" had been made.

The current four-year contracts expire at 11:59 p.m. EDT Wednesday. GM and Chrysler workers can't strike over wages if an agreement isn't reached by then, a condition placed on them when the companies took government bailout money two years ago. Instead, the UAW will likely choose to extend the current contracts, as it did with Ford Motor Co. on Tuesday.

As of early evening, the UAW hadn't extended its contracts with GM or Chrysler.

Joe Ashton, the UAW's vice president in charge of the GM negotiations, told local union officials Tuesday night in a note that bargainers have made "much progress" in talks with the company. GM has taken the lead on the negotiations and its agreement may be used to set the pattern for the other two companies.

The contract talks will determine wages and benefits for 111,000 union workers at the auto makers, and they also set the bar for wages at auto parts companies, U.S. factories run by foreign automakers and other manufacturers, which employ hundreds of thousands more. The contract talks are the first since GM and Chrysler needed government aid to make it through bankruptcy protection in 2009.

Ashton wrote that "difficult restrictions" have been placed on the union and company as a result of the bailout. GM nearly ran out of cash and needed $49.5 billion from the government to survive, but it's been making billions in the last two years because its debt and costs were lowered in bankruptcy and its new products have been selling well.

To get the government funding for GM, the union had to agree not to strike over wages at GM and Chrysler, which also needed government help. Also, unresolved issues can be taken to binding arbitration, and the union's new contracts must keep the companies' labor costs competitive with Asian automakers such as Toyota Motor Corp. and Honda Motor Co.

"As you know, several difficult conditions were agreed to in order to obtain financing during the bankruptcy," Ashton wrote in the note to local union officials. "We are confident that we can reach an agreement that will meet many of the goals we set at the beginning of negotiations."

The union has been seeking bigger profit-sharing checks instead of pay raises, higher pay for entry level workers who make $14 to $16 per hour, signing bonuses and guarantees of new jobs as auto sales recover. Ford and Chrysler want to cut their labor costs to get them closer to Honda and Toyota, while Chrysler wants to hold its costs steady.