DETROIT
DETROIT (Reuters) - The United Auto
Workers union looks set to announce approval of its labor contract with General
Motors Co on Wednesday as more than half the local bargaining units have voted
in favor of the four-year deal.
Ratification of the GM deal, which includes bonuses instead of hourly wage
increases, would clear the way for the union to complete talks with the
automaker's crosstown rival, Ford Motor Co.
The UAW had indicated a deal with Ford could yield a proposed contract this
week, although an update for union members by Ford negotiators on Tuesday night
said only that talks continued, and there were no major developments to
report.
Voting ends Wednesday on the GM contract, which would be the first for 48,500
GM hourly workers represented by the UAW since the automaker's 2009 bankruptcy
and restructuring.
GM executives have set a conference call with Wall Street analysts for
Wednesday afternoon to explain the financial implications of the contract for
the first time.
The deal would add or save more than 6,000 U.S. factory jobs, raise wages for
entry-level employees and pay each worker at least $11,500 in bonuses over the
four years.
The terms also would leave GM's break-even point unchanged and allow the
automaker to tackle the risk of its underfunded pension plan, one of the few
issues left unaddressed by the restructuring directed by the Obama
administration.
"When we went into this labor negotiation, we were very focused on that," GM
Chief Executive Officer Dan Akerson told a conference in New York on Tuesday.
"We could not do anything to negatively bias our break-even point."
UAW President Bob King joined the Ford talks this week, and the focus shifted
to the tough economic issues.
Teams of negotiators for the union and Ford, the only U.S. automaker to avoid
bankruptcy, have been meeting for about two months. The two sides typically
address financial issues in the final stages of negotiations.
The union began an intense focus on Ford last week, a day after failing to
finalize a deal with Chrysler Group LLC. It has extended its contract with the
Fiat SpA-controlled automaker until October 19.
Observers are interested in the extent that the UAW will adjust contract
terms to the different financial positions of the three Detroit
automakers.
CHRYSLER TALKS
While UAW officials in the Ford talks said on Monday they expected "to have
good news for our membership by the end of the week," discussions at Chrysler,
the smallest and most fragile of the Detroit automakers, are progressing much
more slowly. Those talks continued on Wednesday, a Chrysler spokeswoman
said.
Chrysler, which nearly collapsed two years ago, is still executing its own
financial turnaround and trying to change public perceptions of its vehicle
lineup. The company emerged from bankruptcy protection with a debt load that
included $7.6 billion in government loans.
In May, Chrysler repaid those loans through a refinancing that helped cut its
interest payments, but effectively swapped government loans with private
ones.
As a result, Chrysler is eager to hold down its fixed costs beyond the 2015
expiration of the deal now being negotiated.
Last week, Chrysler CEO Sergio Marchionne told reporters in Italy that workers should not
expect the package proposed at GM, calling it a "completely different" entity
from his company.
As of Wednesday morning, at least 28 of the about 50 UAW locals for GM plants
had voted for ratification, while three had voted against it, according to
Reuters interviews and a tally by a union dissident group.
Locals reporting results on Wednesday morning included the Lordstown, Ohio,
assembly plant, where 74 percent of a large turnout backed the deal, and the
Lake Orion plant near Detroit, where 56 percent voted yes. Lake Orion is the GM
plant with the most entry-level workers, who earn about half the pay of
traditional workers.
(Reporting by Ben
Klayman in Detroit; Editing by Lisa Von Ahn)
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