Labor talks between General Motors Corp. and the United Auto Workers union intensified yesterday amid reports from some sources that both sides were working toward a weekend settlement.
A GM settlement by Saturday would coincide with the union's plans to announce the ratification of a generous new four-year contract with DaimlerChrysler AG on that day, according to sources familiar with the negotiations.
A ratification vote on a new three-year agreement between Ford Motor Co. and 13,300 workers represented by the Canadian Auto Workers, which is independent of the American UAW, is scheduled for Sunday, sources said.
The Canadian union reached its deal with Ford at 9 p.m. Monday, averting a strike set to begin at midnight. The tentative settlement between DaimlerChrysler and its 75,000 UAW-covered employees was reached Sept. 16.
Both the proposed DaimlerChrysler and Ford of Canada contracts call for 3 percent annual wage increases, cost-of-living adjustments roughly equal to the inflation rate, and an up-front, lump-sum payment equal to $1,350 (U.S.).
By closing similar deals with DaimlerChrysler, Ford of Canada and GM, the union hopes to put pressure on Ford's U.S. officials to accept a comparable contract.
This reverses a recent strategy in which Ford, once heralded as having the best labor relations among the three biggest car companies in the United States, often was chosen by the UAW as the lead company for contract settlements.
But Ford now finds itself in the unusual position of trailing GM and DaimlerChrysler in making a painful but crucial, business decision--namely, divesting itself of a costly, vertically integrated auto-parts company.
GM completed the spinoff of its in-house parts operation, Delphi Automotive, on April 12. DaimlerChrysler, formed through the 1998 merger of Germany's Daimler-Benz AG and America's Chrysler Corp., long has had the least vertically integrated operations among the biggest car companies in the United States.
That leaves Ford with its Visteon components company--and a restive group of Wall Street investors who are pressuring Ford to set Visteon free, thus allowing the parts maker to seek cost savings through open-market competition.
UAW President Stephen P. Yokich opposes attempts to separate Visteon from Ford, saying that cost efficiencies from such a separation could come from the loss of UAW jobs. In an attempt to increase pressure on Ford to hold on to Visteon, the union asked for and received a "plant closing and sale moratorium" in its new agreement with DaimlerChrysler.
The moratorium says that DaimlerChrysler "will not close, nor partially or wholly sell, spin-off, split-off, consolidate, or otherwise dispose of in any form, any plant, asset, or business unit of any type, constituting a bargaining unit under the agreement."
Auto industry analysts barely blinked at the proposed moratorium, saying that it will have little effect on DaimlerChrysler's U.S. operations if, as expected, it is approved. GM, now that it has rid itself of giant Delphi, easily could accept a similar provision, analysts say. But a comparable settlement clause could become a big cost-control headache for Ford, according to industry analysts.
About 101,600 Ford employees are covered by UAW contracts, including 23,500 at Visteon.