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GM, Delphi, UAW Remain in Talks

September 17, 2003

DETROIT (AP) _ The United Auto Workers and General Motors Corp., along with major automotive supplier Delphi Corp., continued work toward new labor contracts Wednesday, more than two days after the previous pacts expired.

Employees for both sides reported to work as usual, as they have all week. UAW President Ron Gettelfinger has said the sides will remain at the bargaining table until new contracts are agreed upon.

The UAW already has reached tentative terms with Ford Motor Co., DaimlerChrysler AG’s Chrysler Group and supplier Visteon Corp.

``Talks continue,″ was the only comment from Luce Rubio, a spokeswoman for Delphi, which has 30,000 UAW workers.

GM, the world’s largest automaker, has 115,000 active UAW workers and 340,000 retirees and spouses.

Gettelfinger said early Monday, when the Chrysler deal was announced, that the contract with the No. 3 U.S. automaker would serve as a model for the others. He reiterated that point late Monday night when tentative pacts with Ford and Visteon were announced.

Still, it’s not unusual for the union and automakers to encounter stumbling blocks during negotiations on company-specific issues, and analysts say that’s likely what’s happened with GM and Delphi.

Delphi was spun off from GM in 1999, and the automaker remains its biggest customer. The union has said it would like for GM to continue buying parts from Delphi as opposed to nonunion suppliers. At the same time, GM is under intense pressure to lower operating costs and conduct business as efficiently as possible.

The UAW, Ford and DaimlerChrysler have declined to discuss specifics of the proposed four-year contracts, but 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 between 2 percent and 3 percent in the third and fourth years.

The union also managed to avoid any radical changes to its low-cost health care insurance program. Co-payments for brand name prescription drugs are expected to double to $10, while co-pays for generics will remain $5, one of the sources told The Associated Press.

The sources, who spoke on condition of anonymity, said the pacts also include provisions for plant closings or sales.

The heads of UAW locals representing Chrysler plants were scheduled to hear specifics of the tentative pact Thursday morning.

Representatives of at least seven Chrysler parts plants were meeting Wednesday with Nate Gooden, the UAW vice president overseeing negotiations with Chrysler, to discuss their fate. Union officials attending the meetings declined to discuss details.

DaimlerChrysler has said part of an ongoing restructuring involves selling some noncore automotive operations such as parts plants, but company spokeswoman Debra Nelson said she couldn’t comment on plans for any plants before the contract’s ratification process.

However, Temperance Perkins, president of UAW Local 227, which represents between 500 and 600 workers at DaimlerChrysler’s McGraw Glass Plant, said she received word Monday from the UAW that McGraw is targeted for closing by year’s end.

Also, workers at DaimlerChrysler’s Indianapolis Foundry said managers have told them the company plans to phase out almost 800 jobs there during the next four years.

Merrill Lynch analyst John Casesa said negotiations so far have been ``in line with our expectations for a peaceful settlement.″

``The deal doesn’t constitute a material change in the economics of the domestic auto industry,″ Casesa said in a research report.

On the new terms for wages, Casesa said signing bonuses and lump-sum payments generally are better for the companies than wage increases ``because they don’t raise the base on which pension benefits are calculated.″

The sluggish economy and stock market losses in recent years have created massive pension liabilities at automotive and other major U.S. companies.

Heading into negotiations, Gettelfinger was adamant the union would not move backward on its medical benefits.

In exchange, automakers are expected to have more flexibility in plant closings or divestitures, something both DaimlerChrysler and Ford had sought.

As part of its ongoing restructuring, Ford has said it 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.

GM hasn’t publicly targeted any plants for closing recently.

Casesa said the likelihood of six plant closures among the Big Three ``is fully in-line with our expectations.″

In trading Wednesday on the New York Stock Exchange, GM shares fell 19 cents to close at $41.69, Ford was off 14 cents to $11.49 and DaimlerChrysler’s U.S. shares were down 3 cents to $38.17.

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On the Net:

DaimlerChrysler: http://www.daimlerchrysler.com

Ford: http://www.ford.com

General Motors: http://www.gm.com

United Auto Workers: http://www.uaw.org

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