UAW loses grievance with Ford over ‘equity of sacrifice’

DETROIT, Thu Jul 19, 2012 – An arbitrator has sided with Ford Motor Co. in a grievance brought by unionized workers who had sought compensation for pay and benefits that the United Auto Workers employees said non-union salaried workers received, according to the UAW’s Ford Department.
The unionized workers claimed that it was in their contract with Ford that they get the same wages and benefits given to salaried workers.
The UAW Ford Department announced the arbitrator’s decision on its Facebook page.
There are about 41,000 UAW-represented Ford workers, all of them in the United States.

Chrysler, UAW reach tentative four-year labor contract

DETROIT ― The United Auto Workers and Chrysler Group LLC reached tentative agreement on a four-year labor contract for the No. 3 U.S. automaker’s 26,000 hourly production workers, the union said on Wednesday.

This is the first labor pact for Chrysler since its 2009 bankruptcy and federally funded bailout.

The agreement follows deals between the UAW and Chrysler’s Detroit rivals, General Motors Co and Ford Motor Co.

The GM contract was ratified by workers late last month, and Ford workers are in the process of voting on their pact. While the GM contract was ratified by a nearly 2-to-1 margin, early returns from Ford local union halls show essentially a 50-50 split. The voting at Ford continues through Oct. 18.

In a press statement, UAW President Bob King said the Chrysler contract will create 2,100 U.S. jobs and commit the company to a $4.5 billion investment in vehicle production.

Further details will be issued later Wednesday by the UAW.

Chrysler is managed and majority-owned by Italy’s Fiat SpA. Fiat shares were up 5 percent to an eight-week high following news of the Chrysler agreement.

Labor analysts do not expect the contract to be as generous for workers as the deals at GM and Ford, due to Chrysler’s relatively poor financial position.

Fiat took the reins at Chrysler after the company’s 2009 restructuring. Chrysler has since reversed a slide in U.S. auto sales and repaid U.S. government loans. However, it remains in much weaker financial position than GM or Ford.

The 2009 U.S. rescue saddled Chrysler with an outsized debt load, in contrast to GM, which emerged from bankruptcy with little debt. Chrysler refinanced $7.6 billion of that debt on its balance sheet in May.

Sergio Marchionne, chief executive of both Fiat and Chrysler, has said Chrysler should not have to accept as expensive a contract as Ford and GM.

“Some of the deals that we’ve seen being signed between Ford and GM (with the UAW) are probably, given Chrysler’s own predicament … overly generous,” Marchionne said last Friday.

The UAW’s talks with Chrysler began in late July but stalled last month as the company pushed for more union concessions than its Detroit rivals got.

Ford was the only one of the three Detroit automakers to avoid bankruptcy and restructuring in 2009.

Ford’s tentative deal with the UAW calls for each veteran hourly worker to get at least $16,000 in bonuses. The GM deal is slightly less generous, but Ford may benefit as lower-paid new workers fill new positions or replace veteran employees.

United Auto Workers union nears OK of four-year GM deal

DETROIT ― 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 Oct. 19.

Observers are interested in the extent that the UAW will adjust contract terms to the different financial positions of the three Detroit automakers.

UAW expects GM contract deal after ‘much progress’

DETROIT ― The United Auto Workers union has made “much progress” toward reaching a new contract with General Motors Co. to replace a deal on wages and benefits that expires just before midnight on Wednesday, a senior union official said.

“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 on negotiations for the 49,000 union-represented workers at the top U.S. automaker.

The comments from Ashton represented the most upbeat assessment from the union since negotiations entered a more intensive phase over the past week.

Ashton said the union’s goal was to reach a tentative contract deal with GM, rather than face arbitration.

The union was barred from calling a strike at GM under the terms of the automaker’s restructuring in its 2009 bankruptcy funded by the Obama administration.

“Our negotiations with management have reached a critical stage as we near the expiration of the national agreement,” Ashton said.

A day earlier, Ford Motor Co and the UAW agreed to extend their contract to allow for the union to reach an initial deal with GM or Chrysler Group LLC.

Negotiations in Detroit between GM and Ashton’s UAW negotiating team broke off around 11 p.m. on Tuesday night, a person familiar with the talks said.

Talks continued at Chrysler late the night on Tuesday. The union’s Chrysler negotiating team said it was working “tirelessly” to reach a deal in an update on its Facebook page.

In these talks, which will set wages and benefits for about 113,000 workers for the next four years, the companies are focused on keeping labor costs down. The UAW is angling for more auto production jobs in the United States as well as one-time bonuses because of the industry’s improved profitability.

The negotiations are being watched by investors as an indication of how much Detroit has changed since the steep downturn and sharply tighter financing that almost forced GM and Chrysler out of business in late 2008 and threatened Ford.

GM Chief Executive Dan Akerson and Vice Chairman Steve Girsky have been involved in the GM talks over the past week, people with knowledge of the proceedings have said.

Chrysler Chief Executive Sergio Marchionne left the Frankfurt auto show on Tuesday night to return to Detroit, a source said.

If the deadline is not met, the union and the company teams would have to agree to extend the current contracts, which is seen as a routine matter, analysts have said.

GM has about 49,000 UAW-represented workers, Ford has about 41,000, and Chrysler, controlled by Italy’s Fiat SpA, has about 23,150.

Fiat CEO Marchionne says there’s no rush to buy VEBA’s Chrysler stake

TURIN, Italy ― Fiat SpA is in no rush to buy the remainder of Chrysler from a United Auto Workers trust fund and cannot be forced to launch a Chrysler IPO until 2013, Fiat Chief Executive Sergio Marchionne said.

The Italian carmaker has increased its stake in Chrysler to 52 percent, raising speculation Marchionne may be aiming to take full control of Chrysler ― of which he is also chief executive.

The VEBA trust fund holds a 45.7 percent stake in the Detroit-based carmaker.

“We are not obliged to buy (the VEBA stake),” Marchionne told reporters on Monday.

“We have the right to buy a portion of their interest. We can start discussions in the second half of 2012. And they can’t force the company to launch an IPO before 2013, so we have a lot of headroom going forward,” Marchionne said.

The VEBA fund is not planning a quick exit from Chrysler and is looking at various options to cash in on its holding, sources familiar with its strategy told Reuters last week.

These include selling to an investor which could be Fiat or selling in a public share offering, the sources said.

Fiat, which has managed Chrysler since a 2009 bailout, took its stake in the number three U.S. carmaker past the 50 percent mark last week after the U.S. Treasury agreed to sell its remaining 6 percent holding for $500 million. Fiat also agreed to pay $75 million for the right to buy all of VEBA’s stake for a capped “threshold amount” ― which was set at $4.25 billion in 2009, increasing at a 9 percent annual interest rate, so analysts say it has now risen to around $5 billion.

Fiat already had an option to buy 40 percent of the VEBA stake, starting in June 2012, and Marchionne said it had plenty of time to make up its mind.

“The dialogue (with VEBA) has always been open. But there has been nothing in particular about their position as shareholders in Chrysler,” Marchionne said.

Fiat has also offered $125 million to buy the Canadian government’s 1.7 percent stake in Chrysler, as Marchionne tries to strengthen Fiat’s grip on the company.