Ford Assumes that it will be Chosen as the Target Company for UAW Talks

Negotiations between Ford and the United Auto Workers have not commenced yet but the automaker is already assuming that it will be the target of UAW in the contract talks and will use a Ford deal as the basis for pay and benefit with its negotiations with the other two major US automakers, that is according to an individual familiar with the whole situation.

Marty Malloy, Ford's Vice-President of Labor Affairs has told employees through a webcast last Wednesday that Ford the producer of Volvo accessories would continuously assume that it will be the lead company during the contract talks until the United Auto Worker Union said so otherwise.

Mr. Mallory has based such assumption from a practice called pattern bargaining wherein the UAW would negotiate a deal with one target automaker and then make use of the agreement as basis for the other remaining automakers.

The United Auto Workers is to discuss with the Big Three US automakers namely Ford, General Motors, and Chrysler Group the terms for their benefits and payments. The negotiations will open with all three automakers at the same time, and then the UAW can come to terms with one them and afterwards present that contract to the other two carmakers.

Malloy also said that the United Auto Workers have not picked a target company during the 2003 contract talks but he is not sure whether the same thing will happen this year.

On the other news, the Chrysler Group has started the talks with the AUW last Friday wherein they have discussed retiree health care costs that were primarily aimed at providing Chrysler with a cost-saving deal the same kind that the union has granted Ford and GM.

Chrysler has lost $1.4 billion last 2006 and right now it needs a great amount of consideration from the UAW to get rid of its cost gap with its more efficient Japanese rivals.

Currently Chrysler's hourly labor cost is $75.86 higher than that of GM with $73.26 and Ford with $70.51 that is basing on the data gathered by the automaker.

It has estimated that its US wages are 60 percent more than that of Toyota which last year overtook Chrysler as the No.3 automaker in the US. The car maker has also cited Japan's weak yen as a factor that provides Toyota and the other Japanese automakers with a much higher cost advantage.

Chrysler is also paying its 26,000 UAW-represented employees with over $30 per hour more than that of Japan's very own Big Three namely Toyota, Honda, and Nissan pay their American workers. This is very reason why Detroit's Big Three is working hard to get a concession with the UAW in terms of benefits and salaries.