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Hopes Fading for Quick Settlement in Auto Talks

Two-tier wages could be sticking point.

by on Aug.30, 2011

UAW President King insists the U.S. is not broke.

Chances for a quick and amiable settlement in contract talks between the United Auto Workers Union and Ford Motor Co, General Motors and Chrysler Group appear to be fading as labor and management head towards their Sept. 14th deadline.

Both sides continue to put a positive spin on the pace of talks – at least for public consumption – but sticking points are starting to develop.  The union, for one, is taking an increasing tough tone on the two-tier wage system the Big Three insist they need to stay competitive.  And, the manufacturers warn, that without a sense they can remain on a cost par with their foreign competitors they will need to consider exporting more jobs.

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On the other hand, the makers are also dangling a carrot, suggesting that labor peace could lead to significant job creation in a domestic industry that has seen its job base shrivel over the last several decades.

The two-tier wage debate has spurred angry talk – and some local demonstrations – in recent weeks, though UAW president Bob King continues to insist he is “upbeat” about the prospects for reaching a peaceful resolution.