Silence bodes well in talks for UAW contracts

The companies lost a total of $15 billion last year, and they want to cut that loss.

DETROIT (AP) — With contracts between the Detroit Three automakers and the United Auto Workers set to expire in just three weeks, neither side is saying much about what’s happening at the bargaining table. And that could be a good sign.

Some union officials and industry analysts take the silence to mean that Chrysler LLC, Ford Motor Co. and General Motors Corp. are making progress in talks that could be critical to the survival of the domestic auto industry.

Historically, both sides have aired grievances publicly when things weren’t going well, said Aaron Bragman, an auto industry analyst with the consulting firm Global Insight.

“If things were going poorly you’d be hearing a lot of saber rattling,” Bragman said. “From what we hear, they’re sitting down and they are making some serious propositions back and forth. We’ll see what comes of it.”

At issue is the companies’ quest to reduce the difference in what they and their Japanese competitors pay in labor costs. The Big Three say there’s a gap of about $25 per hour. The companies, which lost a combined $15 billion last year, want to cut that cost, including their huge liabilities for retiree health care.

The union, on the other hand, says labor is only 10 percent of a vehicle’s cost, leaving the companies with room elsewhere to trim expenses.

Confidence expressed

Without giving details, Ford Chief Executive Alan Mulally said he thinks an agreement can be reached before the national contracts expire Sept. 14.

“I am cautiously optimistic that we’re going to come to an agreement that improves Ford’s competitiveness and we’re going to do it on time,” Mulally said Wednesday night. “The way that everybody is working this together is very gratifying because we all know the seriousness of these discussions.”

Few have more at risk in the talks than Jim Graham, president of a UAW local at a sprawling GM factory complex in Lordstown, Ohio, that employs about 3,200 hourly workers. His plant makes the Chevrolet Cobalt and Pontiac G5 small cars, which go out of production after the 2009 model year, and so far, GM hasn’t assigned it a new product.

In an effort to lure a new vehicle to the complex, its two locals were negotiating what’s called a competitive operating agreement to ease union work rules. But the UAW’s leaders pulled the Lordstown talks into the national bargaining before a deal could be reached.

Now Graham is hoping that the silence from Detroit is a good thing.

“I’m still very, very optimistic,” he said Thursday. “I know both sides in Detroit, union and management, know what’s at stake in the auto industry and they’re going to make the right decisions.”

Another good sign

The GM talks have gone well thus far, and even with the deadline three weeks away, the sessions have not yet spilled into the weekends, according to a person familiar with the negotiations. The person wouldn’t be identified because he isn’t authorized to speak about the talks.

At Chrysler, spokeswoman Michele Tinson said negotiators have exchanged proposals and the company is working “to address the competitive disadvantages.”

David Cole, chairman of the Center for Automotive Research in Ann Arbor, also said no news is good news when it comes to bargaining. The talks aren’t going seven days a week yet because many of the issues have been on the table for months, even before the official start of bargaining in July, he said.

“I think they’re making pretty good progress, and I think there is a mutual understanding of what they have to do,” Cole said. “It’s significant because they’re betting the domestic industry on these negotiations in many ways.”