Thursday, September 11, 2003

DETROIT (AP) — The United Auto Workers and Big Three automakers appeared close to simultaneous labor agreements yesterday, three days before the current pacts expire, said union and auto officials familiar with the talks.

The sources, who spoke on the condition of anonymity, said agreements between the United Auto Workers (UAW) and General Motors Corp., Ford Motor Co. and DaimlerChrysler AG could be announced as early as today but almost certainly before Sunday’s midnight deadline.

“What would be a surprise is if the talks weren’t settled before the deadline,” said an official with one of the automakers.

The union and Big Three automakers have never reached simultaneous contract agreements. The union typically chooses one carmaker as the lead negotiator and uses that pact as a model for the other two. The union has been bargaining with all three automakers at once this year and has not named a lead company.

Representatives for the automakers and the UAW each declined comment yesterday on the status of the talks.

The UAW and Big Three, with suppliers Delphi Corp. and Visteon Corp., have held contract talks behind closed doors since mid-July. The pacts will cover wages and benefits for 300,000 workers and pension payments and benefits for another half-million retirees and their spouses.

The pace of talks picked up late last week, the union said, leading to speculation that deals could be reached ahead of the deadline.

Intense negotiations continued yesterday, and telephone messages on UAW-sponsored hot lines to update workers said UAW bargaining teams were making steady progress.

General Holiefield, a top aide to UAW Vice President Nate Gooden in the union’s DaimlerChrysler department, said in a recorded message that bargainers were working extended hours “to achieve a contract that best addresses our members’ needs in these difficult times and positions DaimlerChrysler to win back market share and return to profitability.”

At a time when the U.S. market share for GM, Ford and Chrysler is at an all-time low, and foreign automakers continue to expand domestic lineups and capacity, most observers say the probability of a strike is low.

Some analysts and labor observers say the new pacts will likely reflect the difficult predicament of the automakers, whose combined U.S. market share fell to an all-time monthly low of 57.9 percent in August.

Ford is trying to recover from a loss of $6.4 billion in 2001 and 2002. Chrysler lost $1.1 billion in the second quarter of this year and last month was outsold in the domestic market for the first time by Toyota Motor Corp.

The threat of losing more business to Toyota and others was evident as talks began in July. At the time, Troy Clarke, a top negotiator for GM, said he didn’t consider negotiations with the UAW an “us-versus-them” affair because both sides needed to protect themselves from foreign automakers.

Since 1996, foreign companies have increased their domestic capacity from 1.9 vehicles to more than 4 million, and the trend continues.

“The Big Three are making a last stand here and feel they should join ranks and fight off this invasion as best they can,” said David Lewis, a professor of business history at the University of Michigan and an automotive historian.

“The trend is obvious,” Mr. Lewis said. “The Big Three are going backward, and the foreign competition is coming forward.”

Analysts say both sides understand the other’s situations, and that compromise in areas such as wage and pension increases is likely.

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