UAW starts off with tough talk

Ford CEO Alan Mullaly shakes hands with UAW President Ron Gettelfinger at July 23, 2007 contract negotiations, Dearborn, Mich.

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Kai Ryssdal: Executives at Ford and General Motors made a big deal out of shaking hands with auto union negotiators today. Chrysler did the same thing Friday.

But the truth of the matter is that negotiations between Detroit's Big Three and the UAW have been going on behind the scenes for months. The buzz had been that these would be the most congenial discussions the two sides have ever had.

The car companies are in trouble. Union leaders have been clear they understood they'd have to give something back. But UAW head Ron Gettelfinger rocked the boat some this morning. Speaking to reporters, Gettelfinger said, "A strike remains a possibility. That's always an option that we have."

We sent Marketplace's Alisa Roth to find out whether it's an option the UAW can afford.

Alisa Roth: Think of it as the pregame show. Union representatives were at the headquarters of GM and Ford today — for good-natured ribbing and hearty handshakes for the cameras. An earlier version played out at Chrysler last Friday.

Despite the backslapping and smiles, the UAW wants you to know this is no lovefest. Gettelfinger says he's not in the mood to make concessions to the Big Three.

Robert Schulz follows the auto industry for Standard & Poor's.

Robert Schulz: You know, I think it's safe to say we expect a fair amount of rhetoric all around, you know, over the next couple of months.

He says the trick for the UAW will be to find a way to compromise with the Big Three without looking like it's giving into them. Otherwise, it risks losing credibility with its members.

Schulz: There could be progress made on any number of fronts without it being sort of perceived as a concessionary contract per se.

Health-care benefits is one of the biggest issues on the table. Workers and retirees won't let the union give up any ground there — at least not without a fight.

Schulz says one solution could be for the union to make sure retiree health-care benefits stick around, but in exchange agrees to share the cost.

Ohio State historian Kevin Boyle says this kind of cooperation is nothing new. The UAW and the carmakers have always depended each other.

KEVIN BOYLE: Their fates are so intimately linked. I mean, the UAW has always done well when the domestic auto industry does well. The UAW suffers when the domestic auto industry suffers. Their fates are absolutely tied together and everybody knows that.

That means, of course, it's in everybody's best interest to come to a fair agreement.

In New York, I'm Alisa Roth for Marketplace.

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