Detroit's Six Year Itch
When the United Auto Workers open Big Three contract talks on June 10, the obvious issues will be on the table: wage hikes, job security, and more money for pensioners. But there may be a new twist. For the first time since 1950, the UAW might chuck tradition and agree to a deal that is longer than the customary three years.
Carmakers have long sought a contract that would last for up to six years, mostly because of the stability it would provide. The union historically has demanded three-year pacts so it can get better terms when carmakers prosper. But UAW President Stephen P. Yokich is mulling whether to give way on the issue in exchange for significant concessions, sources close to the UAW say. A longer contract also would free Yokich to work on the merger of the UAW, United Steelworkers of America, and International Association of Machinists scheduled for 2000. "If you can lock in benefits and wage gains for five or six years, that might be something Yokich could sell to the members," says University of Michigan labor economist Sean P. McAlinden.
Auto makers want a lengthier contract to allow more predictable long-range planning. Many local plant agreements, which cover work rules but not wages or benefits, already last five years or more. And Detroit certainly could live without the triennial wrestling match with the UAW. "My personal opinion is that longer is better than shorter," says Ford Chairman Alexander J. Trotman.
The key question: How much are auto makers prepared to give up to get a long-term deal? Yokich wants key protections against outsourcing to outside parts suppliers. That demand will be a tough sell. And GM may not play ball at all. Despite the conciliatory tone GM Chairman John F. Smith Jr. took toward the union at the company's annual meeting on May 24, GM has signaled that it won't follow any "pattern" contract agreed to by Chrysler or Ford when the Big Three contracts expire on Sept. 14. If that's the case, the contract's length may be the least of the problems this bargaining season.