September 16, 2011 / 1:20 AM / 6 years ago

UPDATE 2-UAW takes Ford grievance to arbitration hearing

* UAW says Ford white-collar pay broke deal

* Arbitration hearing comes day after contract expires

* UAW, GM talks wrap up Thursday, will continue Friday (Adds that GM, UAW wrapped up talks Thursday, to resume Friday, paragraphs 7-8)

By Bernie Woodall

DETROIT, Sept 15 (Reuters) - The United Auto Workers union took a contract grievance against Ford Motor Co (F.N) to an arbitration hearing on Thursday, a day after contracts for all three Detroit automakers expired and hopes for a quick settlement were dashed.

The Ford workers’ grievance claims that the company broke an agreement for equal treatment of unionized workers and salaried employees by giving white-collar workers raises and reinstated 401(k) matches and not reinstating similar increases to unionized workers.

The issue raised in the grievance represents one of the major sticking points in talks between the No. 2 U.S. automaker and the union. Earlier this week, Ford and the UAW agreed to extend the current contract.

Ford and the union have long known that the arbitration hearing was set for the day after the four-year contract for UAW workers was to expire. This led to speculation that a settlement of the grievance would be folded into a new contract.

An outcome is not expected Thursday, a person familiar with the matter said.

Contracts for Ford, General Motors Co (GM.N) and Chrysler Group LLC expired near midnight on Wednesday. Both GM and Chrysler negotiating teams were back at the table on Thursday with the UAW.

Negotiations between the UAW and GM ended at 9 p.m. Thursday, a person familiar with the matter said. GM and the union were to resume talks on Friday at about 9 a.m.

In a statement, GM said the talks with the union continued to make progress.

“We’re in the overtime, but it’s not unprecedented,” said Harley Shaiken, a labor professor at the University of California-Berkeley.

MARCHIONNE CHIDES KING

In an unusual wrinkle, Chrysler Chief Executive Sergio Marchionne sent a fiery letter to UAW President Bob King Wednesday night saying the union had failed to live up to its commitments. [ID:nS1E78E005]

Labor experts called the letter unprecedented in a signal of how much has changed with the head of a foreign automaker, Fiat SpA FIA.MI, now also running one of the Detroit Three.

Marchionne runs both Chrysler and Fiat, a dual role he has had since 2009 when Chrysler emerged from a government-funded bankruptcy restructuring.

The talks between the UAW and the Detroit automakers began seven weeks ago, and have been watched as an indicator of how much the industry has changed since it nearly collapsed two years ago.

“We did not accomplish what leaders who have been tasked with the turning of a new page for this industry should have done,” Marchionne said in the letter to King.

He added that the union and the company had not yet agreed on the procedures for arbitration.

‘SIGNIFICANT PROGRESS’

In the previous six rounds of negotiations since 1990, the first company to reach tentative agreement has come 1 to 12 days after the expiration of the previous contract, said Kristin Dziczek, labor relations director at the Center for Automotive Research in Ann Arbor, Michigan.

Dziczek said it was “an encouraging sign” that Chrysler was back at negotiating tables on Thursday after Marchionne’s letter. In the past, she said, company or union representatives did not always come back to the table the following day after tempers flared in past talks.

In a memo to GM workers early Thursday morning, the UAW said it made “significant progress” in talks with GM. Still, the union had not been able to “secure a new agreement that we would recommend for ratification.”

The talks are playing out at a time of heightened uncertainty over the outlook for U.S. auto sales for the remainder of the year and 2012, with the risk of a renewed recession.

GM and Chrysler workers gave up the right to strike in their 2009 government bailouts funded by the Obama administration.

Ford has the right to strike on major issues in the contract. The arbitration hearing on Thursday is an issue that has been simmering at Ford for more than a year.

If such an impasse takes place at GM or Chrysler on any of the major economic issues such as pay for the so-called “second-tier” workers who make about half the pay of veteran workers, healthcare benefits, or profit-sharing bonuses, those issues must be taken to arbitration. (Additional reporting by Deepa Seetharaman) (Editing by Gary Hill)

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