DETROIT — Negotiators for the United Auto Workers union and Detroit's Big Three automakers labored into the night Wednesday in a bid to avoid production disruptions and clinch their first labor agreement since the $80 billion government bailouts of General Motors Corp. and Chrysler two years ago.
With the current four-year contract with Ford set to expire near midnight, negotiators were well aware of the political ramifications in Washington and for public perception as thousands of new jobs could be created with this new deal.
"Everyone is watching to see how the companies and the union learned their lesson or if are they going to revert to their old ways that got them into the same straits for 2008, 2009," said Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research in Ann Arbor, Mich.
While past contract sessions with the companies and the labor union have been at times rancorous, the current round of talks, ongoing for about seven weeks, have seemed quiet to outsiders. As of Wednesday, Chrysler and GM were said to be far apart with the UAW on terms but making progress while Ford, likely watching GM's lead, was lagging behind on a final deal and got an extension of its contract Tuesday.
"We are confident that we can reach an agreement that will meet many of the goals we set at the beginning of negotiations," UAW Vice President Joe Ashton said in an electronic update sent Tuesday night on negotiations for the 49,000 union-represented workers at GM. "Our negotiations with management have reached a critical stage as we near the expiration of the national agreement."
About 110,000 auto workers, including employees at auto-parts suppliers, are covered by the new union contract. The talks come in the aftermath of some $80 billion in federal aid extended to GM and Chrysler by the George W. Bush and Obama administrations.
UAW President Bob King "went into this negotiation saying his major rationale was he was going to do the right thing to produce and secure American jobs," says John Beck, a Michigan State University professor who runs the school's labor education program.
"If I was John Q. Public, I would worry about that. Ultimately, from a purely functional kind of way of looking at this and the U.S. economy, you want strong consumers with secure jobs and good incomes who can actually spend the money they make on stuff that other Americans produce," Mr. Beck said.
Whether Mr. King, a former Ford worker who rose through the union ranks, can deliver remains an open question. He walks a fine line in bringing home a deal that UAW members will ratify.
Said Ms. Dziczek, "I think the members are looking for a way to share in their company's success and also some form of job security investment in product commitments. What will these companies commit to investing in those plants for the terms of those agreements to sustain employment at those levels?"
While GM is rebounding and has repaid its government loans, Chrysler has improved but continues to struggle. Ford, which accepted no federal money, is making modest gains. Year-to-date sales figures through Sept. 1 show GM at 1.7 million vehicles, a 16 percent increase over last year. Chrysler is up 22.5 percent with 882,000 cars sold while Ford at 1.4 million vehicles sold, is up 11.6 percent from 2011, according to Autodata.
Chrysler in May paid back $7.6 billion in loans from the American and Canadian governments, while GM in April of 2010 paid back $8.1 billion, satisfying its full obligation.
The government now projects it will write off about $14 billion of the original $80 billion investment, but Mr. Obama has touted the program as a success in keeping the two major employers in business.
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