Contract talks between Ford Motor Co. and General Motors Co. and the UAW that are set to begin this year will be muddled with a conflict as automakers seek to shut down as many as six assembly facilities to boost profit while the labor union attempts to save jobs in the middle of an industry recovery.
Ford is planning to shut down a plant in Minnesota this year. It may also decide to close its factories in Ohio and Michigan, which manufacture slow-selling vehicles, according to industry researchers.
On the other hand, GM may transfer or add employees to its existing factories instead of retaining plants in Tennessee, Louisiana and Wisconsin that are either slated to shut or are idle.
Since their last UAW discussions four years ago, Chrysler Group LLC, Ford and GM have lowered costs by closing 10 assembly plants and slashing at least 65,000 union jobs. The last UAW negotiations had established a two-tiered pay system wherein new workers earn less.
Car manufacturers may be seeking to bring more workers into the lower- paying tier in order to preserve some jobs instead of breaking the $85 billion lifeline of the Obama administration to Chrysler and GM. The automakers and UAW disclosed that they are meeting frequently but with an informal setting. UAW will seek early settlements to contracts expiring on September 14, two people who are familiar with the negotiations said last April.
Vehicle sales in the United States may increase to 13 million cars and light trucks this 2011, according to the average estimate of 16 analysts compiled by Bloomberg. In addition, researcher Autodata Corp. states that deliveries increased to 11.6 million last year from a 27-year low in 2009.