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Carmakers, union still seeking a new contract

By Dee-Ann Durbin and Tom Krisher
Associated Press / September 16, 2011

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DETROIT - Negotiations between General Motors, Chrysler, and the United Auto Workers union continued yesterday even though bargainers missed a key deadline to agree on a contract.

The union, which represents 111,000 workers at Detroit’s carmakers, agreed to keep working under the old GM and Chrysler contracts, which expired Wednesday.

General Motors Co. appeared close to a deal. It has taken the lead on negotiations and its agreement may be used as a model for the others.

Chrysler Group LLC’s negotiations were strained, however. Just before Wednesday’s contract expiration, chief executive Sergio Marchionne wrote an angry letter to the UAW president, saying he failed to show up to finalize a deal.

Talks also continued with Ford Motor Co., but little progress had been made. On Tuesday, the UAW extended its contract with Ford indefinitely.

Negotiations, which began earlier this summer, will determine wages and benefits. They will also set the bar for wages at auto parts companies, US factories run by foreign automakers, and other manufacturers. The talks are the first since GM and Chrysler needed government aid to make it through bankruptcy protection in 2009.

The union wants bigger profit-sharing checks instead of pay raises, higher pay for entry-level workers, and guarantees of new jobs. Ford and GM want to cut labor costs, while Chrysler wants to hold its costs steady. Health care costs are also an issue.

Until Wednesday’s deadline, the negotiations seemed free of the acrimony marking past talks. As part of the bailouts, GM and Chrysler workers agreed not to strike over wages. In the past, workers might have gone on strike.

But the mood turned tense for Chrysler. Marchionne complained Wednesday that he had been snubbed by UAW president Bob King. That caused the two sides to miss the deadline for the new agreement, he wrote.

King would not comment on the letter.

Marchionne said a few mainly economic issues separate the two sides. He told King he will be traveling until next week. He said he would agree to a weeklong extension of Chrysler’s current contract.