DETROIT (Reuters) - The United Auto Workers union expects to give no further concessions to U.S. automakers in contract talks next year and will seek to share in company profits in some way, President Bob King said on Wednesday.
King, elected to the union’s top spot in June, also said Ford Motor Co (F.N) has not been left at a labor cost disadvantage to rivals General Motors GM.UL and Chrysler that restructured in government-funded bankruptcies last year.
“Let me say this as clear as I can, I do not think there will be any concessions in 2011,” King said at Reuters Global Autos Summit appearance in Detroit.
The UAW in 2007 accepted an historic deal on retiree healthcare that created a Voluntary Employee Beneficiary Association, or VEBA, that took billions of dollars of liabilities off the books of automakers.
The 2007 contracts included a second-tier wage for entry level workers with lower healthcare and retirement benefits.
After that, UAW workers ratified more concessions to the U.S.-based automakers, the last of which for GM and Chrysler as they underwent their deep restructurings.
Barely a year later U.S. automakers show renewed strength. Ford posted a full year profit in 2009 and expects a solid profit in 2010, GM has priced one of the biggest ever IPOs and Chrysler’s turnaround has started to gain traction.
“People want to reward our members and it will be a key component of the 2011 bargaining,” King said.
“When the industry comes back, just like we’re sharing in the downside we’re going to share in the upside,” King said. “That’s a key foundation of what we’re doing in 2011.”
Ford workers rejected a last round of concessions that would have taken the automaker’s labor costs in line with the value of concessions given to GM and Chrysler, but Ford has gained more than that back since then, King said.
“There’s no competitive gap between Ford, GM and Chrysler right now,” King said.
The union has also agreed to a second-tier wage of close to $15 per hour for workers at a GM plant in Michigan who will build a Chevrolet subcompact, creating some friction among UAW members. It will be the only subcompact built in a U.S. plant.
King defended the agreement as critical to getting the production shifted to the United States from South Korea and said the union was open to discussing similar terms of Ford and Chrysler were to build Aveo-sized cars in the United States.