UAW Narrows Lead-Company Bargaining Choices to General Motors and DaimlerChrysler

Strategic Insights -

The United Automobile Workers (UAW) union has narrowed its lead-company bargaining choices to General Motors (G.M.) and DaimlerChrysler A.G., rather than focusing on Ford Motor Company, which had been the target for the last two contracts. This decision comes as the current three-year contract, covering about 350,000 UAW members, is set to expire at midnight on September 14. The UAW traditionally prioritizes the company it believes it can secure the best deal with, setting a pattern for the other two. The selection of the lead company will determine the pace of negotiations, with each auto maker preferring to go first to fashion an agreement that suits it.

Key Takeaways:

  • The UAW has narrowed its lead-company bargaining choices to General Motors and DaimlerChrysler A.G., leaving Ford Motor Company out of the initial negotiation process.
  • The current three-year contract, covering about 350,000 UAW members, expires at midnight on September 14, and the union will focus on securing the best deal with one of the selected companies.
  • David Healy, an analyst at Burnham Securities Inc., believes DaimlerChrysler has the best chance of being selected to go first due to its profitability, good cash flow, and the union's push to organize its Mercedes plant in Alabama.
  • The UAW's decision may be influenced by DaimlerChrysler's nonunion plant in Alabama, which the union considers a "mortal sin."
  • General Motors is still a contender due to its numerous difficult issues the union would like to iron out, including job security.
  • The pace of Ford talks has cooled, with no subcommittee meetings scheduled over the Labor Day holiday weekend.
  • Union and company bargainers were scheduled to meet in subcommittee sessions at G.M. and DaimlerChrysler over the weekend.
  • DaimlerChrysler and G.M. representatives declined to comment on the report, while Ford spokesman Ed Miller stated that it is the union's decision and they respect it.

Statistics:

  • The current three-year contract covering about 350,000 UAW members expires on September 14.
  • The UAW traditionally focuses on the company it believes it can secure the best deal with, setting a pattern for the other two.
  • David Healy estimates that DaimlerChrysler has a 50-70% chance of being selected to go first, citing its profitability and good cash flow.
  • The UAW is pushing to organize DaimlerChrysler's Mercedes plant in Alabama, a nonunion facility considered a "mortal sin" by the union.

Sources:

  • "U.A.W. Narrows Lead-Company Bargaining Choices" (no date or publication date mentioned)
  • People in the union and companies, as cited in the article
  • David Healy, analyst at Burnham Securities Inc.