DETROIT — With contracts between the Detroit Three auto makers and the United Auto Workers set to expire in just three weeks, neither side is saying much about what's going on across the bargaining table.
But some local union officials and industry analysts take the silence as a sign that Chrysler LLC, Ford Motor Co. and General Motors Corp. are making progress in talks that many say are critical to survival of the domestic auto industry.
Historically, both sides have made public statements 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 sabre rattling,” Mr. 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 hourly labour cost gap with their Japanese competitors, a figure that the companies say is around $25 (U.S.) per hour. The companies, which lost a combined $15-billion last year, want to cut the cost, including their huge liabilities for retiree health care.
The union, on the other hand, says labour is only 10 per cent of a vehicle's cost, and the companies have a lot more work to do on the remaining costs that they can control.
Without giving details, Ford Chief Executive Alan Mulally said earlier this week that he thinks an agreement can be reached before the national contracts expire on 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,” Mr. Mulally said Wednesday night.
The company and the union, he said, know what must be done to make Ford more competitive.
“The way that everybody is working this together is very gratifying because we all know the seriousness of these discussions,” Mr. Mulally told reporters on Wednesday night.
Few have more at stake 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 to be more competitive. But the UAW's leaders pulled the Lordstown talks into the national bargaining before a deal could be reached.
Still, Mr. Graham is hoping that the silence from Detroit is a good thing for his complex just west of Youngstown.
“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.”
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, who didn't want to be identified because he isn't authorized to speak about the talks, said bargaining is progressing as expected.
GM Chairman and Chief Executive Rick Wagoner last week wouldn't answer questions about the contract talks. A UAW spokesman declined comment Thursday evening.
At Chrysler, spokeswoman Michele Tinson said negotiators have exchanged proposals and the company is working “to address the competitive disadvantages versus the transplants.”
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 were on the table for months prior to the official start of bargaining last month, 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.”
