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Bad economy inspires UAW and automakers to make nice

A member of the United Auto Workers enters a union hall near Chrysler's Belvidere Assembly plant in Belvidere, Ill.

Kai Ryssdal: Last month's auto sales were more than a little disappointing. Detroit -- at least in the short-term -- looks to be slipping back into neutral. The sputtering economy provides the backdrop for closely watched contract talks between the United Auto Workers and the Big Three this week.

A deal with General Motors -- they're the lead company in negotiations this time 'round -- may come as soon as tonight. Marketplace's Sarah Gardner reports.


Sarah Gardner: Negotiations between the UAW and automakers have never been a lovefest. But labor expert Gary Chaison says this year might be the closest they've ever come to making nice.

Gary Chaison: There's less shouting at each other and there's more talking to each other.

First off, GM and Chrysler workers can't strike -- they surrendered that right as part of the 2009 government bailout. Second, the union knows the economy stinks and workers don't want the blame for ruining the industry's recovery. And automakers? They have their own reasons for toning down the rhetoric.

Kristin Dziczek: The companies themselves are under intense scrutiny.

Kristin Dziczek is with the Center for Automotive Research in Ann Arbor.

Dziczek: You know, they've taken government money to re-engineer their balance sheets and to reinvigorate their companies and they can't really go do stupid things either.

Dziczek says both sides have to prove they've "learned their lesson" from GM and Chrysler's bankruptcies. Automakers are already paying new workers half what the old-timers are getting. They're now pushing profit-sharing and signing and performance bonuses instead of old-fashioned wage hikes.

Dziczek: Where they would be measured on measures of productivity and quality and perhaps even personal behaviors like attendance.

Autoworkers still could get a modest pay hike in exchange for concessions on health care and profit-sharing. But whatever happens in Detroit won't stay in Detroit. Labor analysts expect other unionized companies to take a cue from these negotiations when their labor contracts expire.

I'm Sarah Gardner for Marketplace.

About the author

Sarah Gardner is a reporter on the Marketplace sustainability desk.

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