The United Auto Workers union has failed to reach a new contract agreement with General Motors, Chrysler, and Ford as the deadline for the talks came and went. While the Detroit Three failed to agree on a new contract with the UAW, all parties involved in talks agreed to maintain their existing contracts as they continue to work toward a solution.
By all accounts, GM seems to be UAW President Bob King’s focus. According to Automotive News, King failed to show up to a meeting with Chrysler CEO Sergio Marchionne. Marchionne had flown from the Frankfurt Motor Show to Detroit in order to finish negotiations with the union before the deadline.
In a letter sent by Marchionne to King after the snub, the Fiat/Chrysler leader said, “We have known about this expiration for a long time. Until now, there have been encouraging signs of a new paradigm governing the relationship between us.” Marchionne continued, “I know that we are the smallest of the three automakers here in Detroit, but that does not make us any less relevant.”
While an agreement from 2009 prohibits the UAW from striking at with GM and Chrysler back in 2009, they can force binding arbitration.
Automotive News reports that Ford, GM and Chrysler are looking to avoid increasing hourly labor costs. King and the UAW are looking to increase signing bonuses, which are estimated to be around $5000 per union member, in order to avoid asking for a cost of living adjustment. The UAW is also seeking a better profit-sharing agreement with the Big Three, since all have found new found success.
While King isn’t asking the Big Three for outright raises, he is seeking to increase compensation for Tier 2, or entry level workers. Tier 2 employees earn around $14 an hour, about half what a Tier 1 UAW employee earns.
Automotive News expects the Ford contract to be the last one finished, although other sources — including The Detroit News – suggest an agreement should be reached no later than Tuesday. Ford is desperately seeking to avoid a wage increase because it says it already pays more to its employees than GM or Chrysler – not to mention those transplants working at foreign automakers like Volkswagen and BMW in the South. Ford says it pays an average of $58 an hour to its workers, as opposed to $56 at GM, and $49 at Chrysler.
Avoiding a pay increase might prove tough for Ford though – employees aren’t happy about the bonuses that top execs like CEO Allan Mulally received this year as a thank you for saving the company from bankruptcy.