United Auto Workers and General Motors Corp. negotiators were close to agreement last night on an emergency contract designed to save corporate labor costs and union jobs.
"A lot of things are on the verge of being settled, if some major pieces fall into place," UAW deputy spokesman David Mitchell said. He said both sides "saw no reason why they shouldn't be able to reach an agreement."
The talks in Detroit mark the third time this year that GM and the UAW have tried to come up with a cheaper contract to replace a current three-year pact, originally scheduled to expire Sept. 14. Two previous efforts, both in January, ended in failure.
The "major pieces" awaiting fitting in last night's talks included a profit-sharing plan and several job security provisions sought by the union.
The UAW wants a profit-sharing plan similar to one granted by the Ford Motor Co. in a contract ratified last month, and signed March 1.
In return for up to $1 billion in projected labor-cost savings over 31 months, Ford agreed to share its profits with union-represented workers whenever its before-tax profits exceed 2.3 percent of total sales by its U.S. operations. The plan excludes participation by Ford's aerospace and land-development divisions.
Ford lost $1.06 billion last fiscal year. GM showed a relatively modest profit of $333 million.
Companies drowning in red ink often grab profit-sharing plans in an effort to win needed pay concessions from workers. But the plans usually are less attractive to profitable corporations. GM, accordingly, has resisted basing its profit-sharing proposals on the Ford model.
The job security issues largely involve plant closings and so-called "outsourcing"--the use of outside contractors, foreign and domestic, to make GM parts.
When the second round of talks with the UAW broke down Jan. 28, GM made good on its threats to close some unprofitable and marginally profitable plants in the absence of a concession agreement. That helped to bring the UAW back to the table March 12. But it also increased the union's insistence that something be done to protect its members from future shutdowns.
In the current round of negotiations, GM has suggested that it might go along with the Ford agreement and place a 24-month moratorium on plant closings. The company also said it would be willing to establish guidelines to limit outsourcing.
But, with more than 145,000 of its UAW-member workers on layoff and the prospect of more layoffs to come, GM has been in the driver's seat during the talks. In return for addressing union concerns, the company has demanded:
A 2 1/2-year contract containing a freeze on current hourly wages for the life of the agreement.
A deferment of three cost-of-living allowances, each about 10 cents an hour, over the next 18 months.
Elimination of nine paid personal holidays, such as individual birthdays.
Lower wages and benefits for new hires.
GM's wage and benefits reduction proposals are similar to those in the Ford agreement. Union officials said as much last week. Final language on several of those points was approved in bargaining sessions Thursday and Friday, prompting media speculation--along with expressions of confidence from union and company officials--that agreement could be reached over the weekend.
UAW negotiators would like to have a tentative agreement in hand Thursday, when they meet in Chicago with the union's 300-member GM bargaining council.