Big profits could cost GM, Ford in UAW talks

General Motors and Ford Motors may be enjoying boom times for the auto industry, but it's likely to cost them in driving a new contract with the United Auto Workers union. Ford is expected to report that earnings per share have nearly doubled when it reports quarterly earnings Tuesday. GM beat analysts' expectations last week in reporting that it earned $1.4 billion in the third quarter. While those kind of results cheer shareholders, they could be even better for union negotiators who will point to them in trying to hammer out new four-year pacts with Ford and GM. Late Sunday, the UAW reached a proposed tentative deal with GM, but no details were announced. Memories linger of negotiations more than a decade ago when generous contracts during the last sales boom — fueled by big sales of profitable SUVs and pickups — were followed by a sales bust. Automakers were saddled with expensive labor contracts even as losses piled up. Ford squeezed by and GM and Chrysler reorganized in bankruptcy. But now, with large vehicles popular again due to low gas prices, momentum has once again shifted to the union. "They are in a stronger bargaining position to negotiate a better deal with GM and Ford, but I would not expect it to be phenomenally better," says Marick Masters, professor of management at Wayne State University School of Business and director of Labor@Wayne.

USA Today

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