Ford, UAW To Kick Off Contentious Contract Talks

The United Auto Workers and Ford Motor Co (F.N) will officially launch talks on a four-year contract on Monday that are expected to be contentious, with rising healthcare costs, job security and the use of temporary workers expected to be major sticking points.General Motors Co (GM.N) and Fiat Chrysler Automobiles NV (FCA) (FCHA.MI) will kick off their own talks with the UAW on Tuesday.

The discussions come at a tricky time for both sides. The union’s long-sought goal of organizing foreign automakers has also proven elusive. Just last month, workers at Volkswagen AG’s plant in Chattanooga, Tennessee, voted narrowly against being represented by the UAW.

At its peak in 1979, the UAW represented 1.5 million workers. Last year, after nine years of gains, membership dropped again, falling 8% to below 400,000.

The union’s gains in recent years came mostly from unionizing casino workers, graduate students and nurses instead of automotive workers.

The UAW represents around 140,000 workers at Detroit’s automakers.

GM in particular has been a target of union ire since announcing the closure of five North American plants late last year.

That move drew widespread condemnation, including from Republican U.S. President Donald Trump. Criticism has persisted despite GM’s stated efforts to seek jobs at other plants for all displaced workers.

In February, for instance, GM announced 1,000 new jobs at a plant in Flint, Michigan, to make highly profitable heavy-duty pickup trucks.When the negotiators for the union and Detroit’s automakers last sat across the table from each other in 2015, U.S. new vehicle sales were booming.

But sales are expected to decline this year and in 2020, meaning Ford, GM and FCA are all under pressure to bolster profit margins. Automakers also face rising costs associated with the development of electric vehicles and self-driving cars.

Meanwhile, the UAW has its own problems.

The union has been struggling with a wide-ranging federal corruption probe. So far seven people linked to the union and FCA have been sentenced in an investigation into illegal payouts to UAW officials.

During a speech at the union’s bargaining convention in March, UAW President Gary Jones put Detroit’s automakers “on notice,” signaling a tougher stance on talks.

“There will be no more quiet closing of plants, no more shipping jobs to Mexico and abroad without a sound,” said Jones.

During the convention, the union announced an increase in the amount of money paid to members if they go on strike.

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