Business & Tech

Car plant closings, corruption color Detroit Three-UAW talks

Ford Motor Co. Executive Chairman Bill Ford opened contract talks with the United Auto Workers Monday in Dearborn, Mich.
Carlos Osorio/Associated Press
Ford Motor Co. Executive Chairman Bill Ford opened contract talks with the United Auto Workers Monday in Dearborn, Mich.

On one side of the bargaining table will be union brass angry about plant closures and embarrassed by scandal. On the other will be auto executives sweating shrinking sales and risky billion-dollar bets to survive an era of disruption.

This is the difficult backdrop the United Auto Workers and Detroit Three have to overcome to clinch new four-year labor contracts. Negotiations kick off this week with handshake ceremonies hosted by one of the largest US unions and car manufacturers employing almost 150,000 members.

General Motors riled the union months ago by putting four US factories on the chopping block. Fiat Chrysler Automobiles and its UAW counterparts are still dealing with the legal fallout from ex-union and company officials draining millions from a union training fund to enrich themselves. And Ford is said to be prepared to ask hourly workers to pony up more for health care that will otherwise cost the carmaker dearly next year.

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‘‘We’ve had a 10-year run of strong economics in the US — that doesn’t stay on forever,’’ Joe Hinrichs, Ford’s automotive president, told reporters Monday. ‘‘We need to maintain a competitiveness and a negotiations process that give us a way to be competitive in any economic cycle.’’

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That’s a sentiment UAW president Gary Jones doesn’t want to hear.

‘‘Despite record profits, labor is still being asked to take concessions,’’ he said. ‘‘Our jobs have been outsourced to companies paying lower wages in the United States, Mexico, China, and all over the world. This must stop.’’

Here’s a look at the key issues the union and automakers have to overcome to before their contracts expire in mid-September:

 Protecting plants: GM’s shock decision to cut off any future product from car and powertrain plants in Michigan, Ohio, and Maryland incensed the UAW and made the company a target of criticism from President Trump, Democratic presidential candidates, and members of Congress.

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  Temp workers: The Detroit automakers were able to offset some of the additional labor cost from raises during the last round of contracts in 2015 by persuading the UAW to let them employ more temporary workers.

But GM’s desire to bring on more temp workers is going to run headlong into UAW leadership, who heard an earful during their bargaining convention in March. Members were fired up about limiting use of temps because they’re paid less, are eligible for skimpier benefits, and have weaker protections under the union contract.

  Health care: UAW members have some of the best health care benefits in America, contributing just 3 percent to their own coverage, compared with 29 percent for the average employee-covered family plan, according to the Kaiser Family Foundation.

Automakers are crying uncle, with a source at Ford saying health care costs for its 56,000 hourly workers will top $1 billion next year for the first time. GM pays about $900 million a year for the health benefits of its US hourly staff.

 Corruption scandal: A dark cloud hanging over this year’s talks will be the corruption scandal embroiling the training center jointly run by Fiat Chrysler and the UAW.

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In what has been a slow-moving public relations nightmare, federal prosecutors have indicted former officials for participating in a years-long scheme that the federal government has said funneled millions to ex-leaders at the company and union.