October 4, 2011 / 12:58 AM / 8 years ago

UAW says contract talks with Ford going "smoothly"

A Ford Fiesta vehicle sits for sale on a dealership lot in Encinitas, California July 25, 2011. REUTERS/Mike Blake

DETROIT (Reuters) - Contract negotiations between Ford Motor Co and the United Auto Workers union are “progressing smoothly” and a breakdown in talks is “highly unlikely,” the union said in a memo on Monday.

On Sunday night, the UAW called local union officials to Detroit for a Tuesday meeting in anticipation of reaching an agreement on a new four-year labor contract.

The UAW described this as an “indication that we believe we are very close to an agreement,” according to the memo.

“If a breakdown were to occur, the current contract details may change significantly,” the UAW said in the notice posted on Facebook. “We believe this scenario to be highly unlikely.”

Negotiations at Ford continued Monday night. Ford’s 41,000 unionized workers expect to reach a richer deal than one ratified last week for 48,500 General Motors Co workers.

A deal at Ford allows the UAW to focus solely on Chrysler Group LLC, the weakest of Detroit’s three automakers and where analysts expects negotiations to be tougher.

Unlike GM and Chrysler, Ford did not undergo a federally funded bankruptcy and bailout in 2009. It is also the only one of the three U.S. automakers where workers can call a strike.

The contracts at all three automakers were to expire on September 14, but were extended. Ford’s contract was extended indefinitely and Chrysler’s contract was extended to October 19.

Chrysler, majority-owned by Italian automaker Fiat SpA, has about 23,500 UAW-represented workers. Sergio Marchionne, chief executive of both Chrysler and Fiat is under pressure to hold the line on costs and a deal there may be the most difficult for the UAW, analysts say.

Reporting by Deepa Seetharaman, editing by Bernard Orr

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