The New Face of Auto Contract Talks
The Big 3 no longer take a unified approach to negotiations but go it alone.
Oct. 10, 2007— -- Detroit lost its dominance over the auto world long ago. But now, as it goes through another round of labor negotiations, it is starting to lose its image as a unified force as well.
It used to be a fight, for the most part, between the auto workers union and the so-called Big 3 automakers: General Motors, Chrysler and Ford.
But these days, it looks as if each of these three automakers is being treated very differently.
Traditionally, the United Auto Workers union and the automakers participated in "pattern bargaining," which means when the union gets a contract from one company it takes that contract to the next two.
This year's negotiations look different.
First, Chrysler is no longer a publicly traded company. It was bought out by the private equity firm Cerberus Capital Management in August, shortly before negotiations began.
Cerberus, headed by former U.S. Treasury Secretary John Snow, brought in former Home Depot CEO Robert Nardelli to be Chrysler's chairman and chief executive officer.
Additionally, the three automakers are facing different problems and are looking for different agreements from the union.
"The UAW will show Chrysler and Ford what they got from General Motors, and they're going to turn around and say we're not impressed, we're different companies," Gary Chaison, a labor professor at Clark University told ABC News.
One difference could involve which plants operate in certain capacities in the future. The GM contract spelled out many of the automaker's future obligations. Cerberus might not be as willing to have its game plan spelled out in a contract.
This year's negotiating season started off with General Motors. The UAW reached a deal for a new contract after a two-day strike, which ended Sept. 26.
The four-year contract with GM includes promises that new cars and trucks will be built at 16 U.S. assembly plants, and it created a union-run trust funded by the company that would be responsible for future retiree health care costs.
Cerberus is making several moves in an attempt to show that it is serious about turning around the troubled automaker and making Chrysler profitable by 2009.
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