DETROIT (AP) – Plant closings or sales and smaller wage increases and pension payouts are part of tentative agreements reached this week between the United Auto Workers union and two of Detroit’s Big Three automakers, according to sources familiar with the pacts.
The UAW, Ford Motor Co. and DaimlerChrysler have declined to discuss specifics of the proposed four-year contracts, but two sources who spoke to The Associated Press on condition of anonymity said 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 managed to avoid any radical changes to its low-cost health care insurance program. Heading into negotiations, UAW President Ron Gettelfinger was adamant that 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 DaimlerChrysler and Ford had sought.
The 1999 contracts, which expired at midnight Sunday, included a $1,350 signing bonus and 3 percent wage increases in each year of the contract. Negotiated during more prosperous times in the industry, those deals also included a ban on plant closings and nearly cost-free health care.
General Motors Corp., the world’s largest automaker, and auto parts supplier Delphi Corp. remained at the bargaining table with the UAW on Tuesday afternoon.
The union has said GM employees will report to work as usual while the closed-door talks, which began in mid-July, continue.
The union normally presents new contracts to its membership before discussing the terms publicly. All agreements require ratification by members, which is expected to take place in the next week to 10 days.
But with the Big Three’s U.S. market share at an all-time low, a glut of manufacturing capacity in North America and aggressive expansion by foreign automakers, most analysts expected less generous packages for the UAW’s 300,000 U.S. auto workers and half-million retirees and spouses.
The union’s deal with Ford, announced late Monday, also covers parts supplier Visteon Corp., which spun off from Ford in 2000 and negotiated along with the No. 2 automaker. The DaimlerChrysler deal was announced early Monday.
Ford is trying to rebound financially from a loss of $6.4 billion in 2001 and 2002. As part of its restructuring, the company has said it plans to close four U.S. plants in Michigan, Missouri, New Jersey and Ohio.
GM hasn’t publicly targeted any plants for closing recently. Neither has DaimlerChrysler, which lost $1.1 billion in the second quarter of this year and last month was outsold in the domestic market for the first time by Toyota Motor Corp.