Auto Executives and Union Officials Seek Longest Labor Contract in Decades

Strategic Insights -

As General Motors, Ford Motor, and DaimlerChrysler prepare to begin talks with the United Automobile Workers (UAW) next week, it appears increasingly likely that negotiators will seek a national labor contract lasting four or more years, the longest such deal since the 1950s. This development comes after last summer's 54-day strike against G.M. in Flint, Mich., which prompted executives and workers to seek a way to avoid another costly showdown this year. Industry and union leaders alike are using the tamest rhetoric in many years, indicating a shift towards a more collaborative approach. The current contract expires on September 14, and a longer agreement would not only provide stability but also give the U.A.W. an advantage in avoiding a power struggle in the summer of 2002, when Stephen P. Yokich, the union's president, must retire.

Key Takeaways:

  • The U.A.W. is seeking a national labor contract lasting four or more years, the longest such deal since the 1950s.
  • Last year's 54-day strike against G.M. in Flint, Mich., has led to a shift towards a more collaborative approach between executives and union officials.
  • Industry and union leaders are using the tamest rhetoric in many years, indicating a reduced likelihood of a strike.
  • The current contract expires on September 14, and a longer agreement would provide stability and give the U.A.W. an advantage in avoiding a power struggle in the summer of 2002.
  • Key issues in talks include job security, particularly for workers at auto parts subsidiaries, and modest changes to the auto makers' health care plans and other employee benefits.
  • The U.A.W. has traditionally negotiated a contract with one auto company first, and then demanded that the other two sign virtually identical pacts.
  • Ford and G.M. seem to have a better chance of being chosen by the union to negotiate the first agreement than does DaimlerChrysler.
  • G.M. executives have softened their criticisms of the union and called for reconciliation, in the hope of avoiding another strike.

Statistics:

  • 54 days: The length of the strike against G.M. in Flint, Mich., last summer.
  • 4-10 years: The possible length of the new labor contract being sought by the U.A.W.
  • 14%: The increase in auto sales that is expected to continue this year.
  • 65: The age at which Stephen P. Yokich, the U.A.W. president, must retire next year.
  • $1.8 billion: The amount that G.M. plans to spend on a commercial lending business from the Bank of New York.
  • 200,000: The number of employees in G.M.'s auto parts unit, Delphi Automotive Systems.

Sources:

  • "Auto Makers and U.A.W. to Seek Longest Contract in Decades" by The New York Times, September 2, 2001.
  • "G.M. to Spend $1.8 Billion to Buy Lending Business" by The New York Times, September 4, 2001.
  • "Auto Makers and U.A.W. Begin Talks for New Contract" by The Wall Street Journal, September 5, 2001.