DETROIT Big Three sales drop puts UAW in weak position

Automakers look to drop a plant closing ban during contract talks.
DETROIT (AP) -- With Big Three automakers' U.S. market share at its lowest level ever recently and profits hurt by generous incentives, Auto Workers are in a weak position to save two key elements of their contracts: nearly free health care and a ban on plant closings.
Industry analysts say the ban is likely to fall victim in talks to replace labor contracts that expire at midnight Sunday.
The United Auto Workers and General Motors Corp., Ford Motor Co. and DaimlerChrysler have held contract talks behind closed doors since mid-July. The pacts will cover wages and benefits for 300,000 workers and pension payments and benefits for an additional half-million retirees and their spouses.
Even with job-protection measures negotiated by the UAW during better times for the industry in 1999, Detroit's automakers have been able to trim roughly 30,000 hourly jobs since then.
These days, more job losses seem inevitable. Some analysts say North America has far too many plants producing cars, trucks and sport utility vehicles, even though foreign automakers continue to add capacity at nonunion plants, largely in the South, to meet growing demand.
Market share drops
While some Asian and European automakers are experiencing hefty and even record sales, GM, Ford and Chrysler have seen their sales decline by nearly 5 percent so far this year.
In fact, the Big Three's combined U.S. market share fell to an all-time monthly low of 57.9 percent in August. On top of that, Toyota Motor Corp. outsold Chrysler, one of the traditional Big Three, for the first time in a single month.
Morgan Stanley analyst Stephen Girsky estimates the Big Three would need to close between seven and 10 plants in North America to move supply and demand into better balance.
As part of its ongoing restructuring, Ford plans to close four U.S. plants -- Edison Assembly in New Jersey, St. Louis Assembly in Missouri, Cleveland Aluminum in Ohio and Vulcan Forge in Dearborn, Mich.
GM hasn't recently targeted any plants for closing, and neither has Chrysler, but two GM plants in particular -- aging factories in Linden, N.J., and Baltimore -- have uncertain fates. Both have only one production shift and no models assigned to them after 2005. Analysts say that each side certainly understand the other's predicament and that compromise, rather than a strike, is likely.
Because UAW President Ron Gettelfinger has insisted the union will not retreat on health-care benefits, some analysts say negotiators are likely to reach agreements that will give automakers more flexibility in plant closings in exchange for continued low-cost medical coverage.