Business

Big three carmaker dialogue to begin Both parties point finger at other side

AUBURN HILLS, Mich. - It was all handshakes and smiles Friday as the United Auto Workers formally opened contract talks with Chrysler Group, and while both sides were cordial, it didn't take long for their differences to surface.

UAW President Ron Gettelfinger, while repeatedly refusing to answer specific questions about bargaining strategy, told reporters that the union already has done a lot to make the Detroit Three more competitive.

He cited health care concessions for General Motors Corp. and Ford Motor Co. and approval of buyout and early retirement packages that let all three companies reduce their work forces.

"We are working with the companies to get where they need to be, and they're going to be strong, viable companies in the final analysis," Gettelfinger said. In the past he has said the union is not in a concessionary mode.

Desire to reduce costs

The automakers, on the other hand, have each said they need to reduce labor costs to become competitive with their Japanese rivals, Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co.

Industry analysts have said reducing costs is critical to the domestic companies' survival amid intense global competition. The three automakers lost a collective $15 billion last year and only GM has shown a profit this year despite continued losses in North America.

Chrysler Chief Executive Tom LaSorda said the negotiations are an opportunity for true change.

"Negotiations are difficult. This one will be no exception. The challenges we are facing are clear," he said.

Chrysler Senior Vice President John Franciosi, the company's chief negotiator, said reducing costs and becoming more competitive is imperative for both sides.

Franciosi also said that while Chrysler would like to get labor costs closer to its Asian competitors, that doesn't necessarily mean concessions for the union.

"We can get very creative. Creativity and innovation by definition are not necessarily concessionary," he said.

The comments came after the traditional ceremonial handshakes that formally kick off the talks, but negotiations have been under way now for months. Similar events will take place on Monday with Ford and GM. The UAW's national contracts with the Detroit Three expire Sept. 14.

Chrysler and the union are focused on health care, with both calling for some sort of national solution to the problem of rising costs for active workers and the huge obligation to care for retirees.

Franciosi said the Detroit Three would begin a more aggressive grassroots lobbying campaign in Washington to address the costs, and LaSorda called health care a national crisis.

Chrysler would favor reducing the Medicare-eligibility age and national catastrophic health coverage as well as an integrated system in which people would be covered no matter where they go, LaSorda said. Gettelfinger often has called for a national health care system.

Both say they are competing against foreign automakers whose governments already pick up the tab for health care.

On the Net

Chrysler: www.chrysler.com

United Auto Workers: www.uaw.org

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