With just a week left before contracts expire with Detroit’s three automakers, the United Auto Workers union says it hasn’t chosen a target company.
But President Dennis Williams said Monday he’ll pick between Ford, General Motors and Fiat Chrysler before the contracts end on Sept. 14.
A target company becomes the focus of bargaining and could be hit with a strike if negotiations stall. A deal with one company also sets a general pattern for the others, although there currently are substantial differences between the three automakers.
Speaking after Detroit’s annual Labor Day parade, Williams didn’t address whether the contracts would be extended and gave no details about how the talks that cover about 140,000 workers are progressing.
“Everybody says to me, ‘Dennis, have you picked a target?’ Yes. General Motors, Ford and Chrysler,” Williams said to applause during a post-parade speech. But afterward, he told reporters that he would choose a single company by the time the current four-year contracts end.
This year’s talks are expected to be the most contentious in years, because all three companies are healthy and making money. The union wants a piece of the profits in the form of hourly pay raises for longtime workers who haven’t had one in a decade. It also wants to close the gap between entry-level workers who make about half the $29 hourly wage of veteran employees.
But companies want to cut labor costs to stay competitive with foreign automakers. All but Fiat Chrysler have costs that are higher than foreign companies with U.S. factories, according to the Center for Automotive Research. Companies want to stick with profit-sharing instead of increasing hourly labor costs. During the past four years, workers at all three companies have gotten healthy annual checks.
Williams has said he doesn’t want a strike, but unlike four years ago, the union can stop work at any of the three companies. In 2011, strikes were prohibited at GM and Chrysler under the terms of their government-funded bankruptcies.
To fund some of the union demands, Williams has proposed a giant health-care pool to save money for the union and the three companies. Currently, a union-run trust pays most health-insurance costs for about 600,000 retirees and their spouses, and the companies fund health care for about 551,000 hourly and salaried workers and their families.