September 13, 2011 / 9:55 PM / in 6 years

UPDATE 1-Ford, UAW extend talks; GM, Chrysler near deadline

* Not close to a deal - Chrysler CEO

* GM, Chrysler face possible contract extension

* Current pacts expire Wednesday night

* Signing bonuses a key issue (Rewrites with extension of Ford talks past the Wednesday deadline)

By Bernie Woodall and Deepa Seetharaman

DETROIT, Sept 13 (Reuters) - Contract negotiations between Ford Motor Co (F.N) and the United Auto Workers union will run past the Wednesday deadline, allowing for an initial deal with General Motors Co (GM.N) or Chrysler Group LLC.

A Ford spokeswoman confirmed that the automaker and the union agreed to continue discussions after the contract expires on Sept. 14 “in an effort to reach a tentative agreement that is in the best interest of both parties.”

UAW leadership has focused on making progress toward a quicker deal at GM and Chrysler, where workers are prohibited from striking under the terms of their 2009 bankruptcies.

At Ford, the only of the three Detroit automakers to have avoided a government-funded bankruptcy, a simmering grievance over the automakers decision to reinstate white-collar profit-sharing payouts will either be wrapped into a contract settlement or decided in arbitration set for later this week.

Jimmy Settles, UAW Vice President and lead negotiator with Ford, told Ford workers about the extension in a memo on Tuesday afternoon.

“As in years past, one company is chosen as the primary target for contract negotiations,” according to the memo obtained by Reuters. “This contract it will either be General Motors or Chrysler, but it will not be Ford Motor Company.”

In these talks, which will set wages and benefits for about 113,000 workers for the next four years, the companies are focused on keeping their labor costs down. The UAW is angling for more auto production jobs in the United States.

The talks are being watched by investors as an indication of how much Detroit has changed since the steep downturn and sharply tighter financing that almost forced GM and Chrysler out of business in late 2008.

Negotiating teams from the United Auto Workers union met into the night Monday at GM and Chrysler. Parallel talks between the UAW and GM and Chrysler in Detroit are expected to continue into the night Tuesday.

As of Tuesday afternoon, representatives of the GM council from local bargaining units had not yet been summoned to Detroit to review proposed contract terms, which must occur before a deal is presented to workers.

Chrysler Chief Executive Sergio Marchionne said the automaker and the UAW are not close to a deal but continue to target Wednesday night for completion of a tentative pact.

“The negotiations are not concluded and I don’t have a contract yet. We are not close,” Marchionne told reporters at an auto show in Frankfurt.

If the deadline is not met, the union and the company teams would have to agree to extend the current contracts, which is seen as a routine matter, labor analysts said.

    GM has about 49,000 UAW-represented workers, Ford has about 41,000, and Chrysler, controlled by Italy’s Fiat SpA FIA.MI, has about 23,150.


    GM, Chrysler and Ford have been working to narrow the gap on issues including the size of signing bonuses for workers once a new contract is ratified, the sources said.

    GM started with a proposal for signing bonuses of around $3,500 per worker, equal to a cost of about $171 million for the automaker, the sources said. That proposed figure is based on amounts paid by other industrial companies such as Deere & Co (DE.N) and Caterpillar Inc (CAT.N) in recent settlements with the UAW.

    Analysts have said signing bonuses will likely be between $5,000 and $7,500 per worker.

    GM’s willingness to consider even higher bonuses hinges on its ability to win concessions in other areas that would offset the higher up-front costs, other sources have said.

    Chrysler has indicated that its signing bonuses should be lower than those paid to workers at the more profitable GM, a person close to the talks said.

    Ford workers may get higher one-time payments than their GM and Chrysler counterparts if Ford and the union roll separate, pending grievances into a contract settlement. Ford workers have authorized a strike in local votes.

    GM has been unwilling to add costs in the form of higher base wages that could widen its cost gap with rivals led by Toyota Motor Corp (7203.T) or hurt it in a renewed downturn. (Editing by John Wallace and Tim Dobbyn)

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