Union takes hard line against concessions Big Three's big profits strengthen UAW's resolve on overtime, outsourcing

April 04, 1996|By NEW YORK TIMES NEWS SERVICE

DETROIT -- Faced with a renewed emphasis by Detroit's Big Three automakers on paring costs, leaders of the United Automobile Workers made clear at a three-day convention in Detroit, which ended yesterday, that they are in no mood for concessions.

With the UAW's triennial round of bargaining approaching this summer with General Motors Corp., Ford Motor Co. and Chrysler Corp., union leaders and auto executives are preparing for labor negotiations that are likely to be the most contentious in many years.

GM, Ford and Chrysler are all strongly profitable and are sitting on combined cash reserves of $30.2 billion, a financial position that has emboldened many in the UAW to urge an especially tough stance this year on a national agreement.

But as more Americans balk at the rising prices of new cars, there is greater pressure on the part of the manufacturers to control costs.

Also, the dollar's sharp rise against the Japanese yen over the last year has left Detroit worried that Japanese cars will soon become more competitive on price in the American market.

Just last month, Ford disclosed plans to eliminate 6,000 engineering jobs to reduce its product development costs, the highest in the industry.

But senior UAW officials took a hard line in speeches and interviews at the convention. President Stephen Yokich said the UAW would demand a reduction in unwanted overtime for workers.

The automakers have been requiring some of their workers to put in six- and seven-day weeks to squeeze out more production. Although overtime is costly, it is less expensive than hiring additional workers with full benefits, automakers say.

The union's leaders also said the union would seek limits on automakers' efforts to buy more parts from low-cost, independent companies, a practice known as outsourcing.

"My priority is, they don't outsource to nonunion facilities," said Carolyn Forrest, the UAW vice president who oversees efforts to organize nonunion factories.

There were threats yesterday of more local strikes similar to the 17-day brake-factory strike last month in Dayton, Ohio, that crippled GM's North American operations.

Jimmy Hyde, president of UAW Local 10 in Doraville, Ga., said his local is considering a strike in August to protest GM's decision to buy seats for its new minivans from an outside contractor.

GM has been retooling the Doraville factory for the introduction of five new minivan models considered critical to the company's profits.

Richard Shoemaker, vice president of the UAW's GM division, said the union has not made any promises to GM to avoid further strikes until after the national bargaining. But other UAW officials said there was some reluctance to authorize further local strikes in the short term while the union assessed the results of the Dayton showdown.

The union's stance on outsourcing appears likely to divide the auto industry.

GM and Ford want the freedom to buy more parts from low-cost, nonunion suppliers, while Chrysler already buys the bulk of its parts from outside companies. Partly because Chrysler seems more amenable to the UAW's demands on limiting purchases from nonunion suppliers, many union officials said this week that they expected the UAW to negotiate a deal with Chrysler first and then demand that GM and Ford accept it.

Chrysler officials have expressed some willingness in recent weeks to halt their moves to buy more parts from outside.

"I wouldn't recommend outsourcing anything," Thomas T. Stallkamp, Chrysler's vice president of procurement and supply, said in a recent interview.

In exchange for some limits on supplier purchases, Chrysler appears likely to demand the right to pay lower wages to new workers for a longer period than they are permitted under the current contract.

Under the existing pact, the Big Three pay most of their workers a wage of $18 an hour or more. But they can hire new workers for $12.55 an hour and gradually raise their wages over three years.

Pub Date: 4/04/96

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