AUTO INDUSTRY Tentative UAW-Big 3 pacts target rivals

At least 10 auto plants are expected to close.
COMBINED DISPATCHES
DETROIT -- Tentative deals between the UAW and the U.S. auto industry are designed to dramatically slow down the rising costs of union wages, pensions and health care -- and could help automakers compete against foreign-owned, nonunion auto plants in the South.
The deal also allows all the automakers to close or sell plants as they grapple with having far more plants than the market demands. At least 10 plants among the automakers -- affecting about 12,000 UAW workers -- will be sold or closed under this contract. Others -- like the 2,400 workers at Ford Motor Co.'s St. Louis assembly plant -- don't yet know their fate.
Negotiations for the four-year tentative national contract wrapped up this week amid distressing times for General Motors Corp., Ford and DaimlerChrysler AG's Chrysler Group. All three are losing business to such companies as Toyota, Honda and Nissan -- and not even record discounts and rebates are helping. Meanwhile, Ford lost $6.4 billion the previous two years and Chrysler lost $1.1 billion in the second quarter. Most of GM's money is being made refinancing mortgages.
Protecting health care
The pact largely protects the union's top-shelf health-care plan -- as UAW President Ron Gettelfinger pledged he would do -- but the UAW did make several notable concessions.
Pensions for future retirees will also grow far more slowly than they have the past decade, while hundreds of thousands of current retirees will get no increase in their pensions for the first time since the 1960s.
There is also a new absentee procedure designed to cut back on unexcused absences.
"The fact is, the industry is facing ... some very challenging times, and that is why this year's set of negotiations were very, very important for the industry," said GM Chairman and Chief Executive Officer Rick Wagoner at a Thursday news conference to announce GM and Troy, Mich.-based parts supplier Delphi Corp. had reached a tentative UAW contract. They were the last two companies to reach a deal with the union.
Chrysler, Ford and parts supplier Visteon Corp. announced tentative deals earlier in the week. All the deals must next be ratified by the rank-and-file workers covered by all the contracts.
Far less lucrative
It is evident from copies of the 2003 UAW-DaimlerChrysler contract settlement obtained by the Detroit Free Press that the 2003 tentative deal is far less lucrative than the 1999 contract for the 307,000 UAW members and the 522,000 retirees and their families covered by the new pact.
The 1999 deal was negotiated at a time when Detroit's automakers -- especially Ford and GM -- were flush with cash from the sale of pricey pickups and SUVs. That's not the case in 2003.
Even the union -- in its 20-page summary of the tentative contract for Chrysler Group workers -- acknowledged the hard times facing Detroit's automakers. The summary was handed out Thursday at the Hyatt Regency in Dearborn, Mich., where more than 800 Chrysler UAW officials were on hand to get details of the tentative contract.
Most of the assembled union leaders appeared to favor the new contract.
Gooden also hammered away at UAW workers who miss an excessive amount of work, which has been a sore spot for Detroit's automakers, which have far more unexcused absences than their foreign rivals.
The economic aspects of the UAW-DaimlerChrysler deal will be mirrored in those contracts at GM and Ford.
Two sources familiar with the deals say they include a $3,000 signing bonus, a lump-sum payment in the second year and wage increases of 2 percent to 3 percent in the third and fourth years. At the end of the second quarter, a UAW-represented assembler earned $25.63 an hour.
Pension slide
One area that is far less rich than the 1999 deal is in the pensions for future and current UAW retirees. Pensions for workers who retire in this contract will grow by about 9 percent, vs. a 19 percent growth over the life of the 1999 deal. Current retirees -- those who are already retired -- will get no raise in their pensions for the first time since the 1960s. On the plus side for retirees, their co-pay on prescription drugs will not grow, while it does for active workers.
In health care, the UAW agreed to language that encourages workers to use generic drugs -- or pay a $10 sanction for name-brand drugs on top of a $10 co-pay. Some UAW workers will now also pay $10 for once-free doctor's visits, pediatric exams, immunizations and allergy shots.
Any reduction in pension and health care spending is important because Detroit's three automakers pay far more in retirement and health benefits to their plant workers than do their foreign rivals.