DETROIT (AP) -- Under a cloud of falling U.S. market share and weakening profits, Detroit's Big Three automakers are set to begin contract talks this week with a defiant Canadian Auto Workers union, which has warned that the carmakers' problems won't keep it from fighting for better benefits.þþGeneral Motors Corp. will kick off talks for a new three-year labor contract with a ceremonial handshake in Toronto on Tuesday. Ford Motor Co. and DaimlerChrysler AG's Chrysler Group will follow over the next two days. The Big Three's contracts with the CAW expire Sept. 20.þþGM, Ford and Chrysler, hurt by dwindling sport utility vehicle sales, billions in health care and pension costs and continued erosion of their U.S. market share, are expected to fight hard for concessions at their benefit-rich Canadian plants. They're also looking to set a tough tone for talks with the United Auto Workers union, which begin next year for U.S. workers.þþThe negotiations come as all three automakers -- not to mention their Asian rivals -- turn to Canada for increasing shares of their assembly plant output because of cost advantages derived from the provinces picking up most of workers' health care expenses. That gives the talks even more importance for the Big Three.þþMichael Robinet, vice president of global forecasting for the Michigan-based automotive consulting firm CSM Worldwide, said Canadian plants will become less competitive with rival factories in parts of South America and Asia -- where workers earn less -- if they keep winning big wage and benefit increases.þþCAW-represented workers get three weeks more paid time off than their UAW counterparts, according to Canadian auto analyst Dennis DesRosiers. The last CAW contract increased pay and benefits by more than 5 percent each year.þþDaimlerChrysler figures show Canadian auto workers receive $8.81 more per hour on average than Asian automakers pay their U.S. workers.þþRobinet expects the CAW to ask for a 5 percent annual increase in wages and benefits, while he said the automakers likely would be satisfied with a 3 percent increase.þþ''CAW needs to open up their eyes to the fact that this is a global marketplace,'' Robinet said. ''Five percent is going to quickly price Canada out of the vehicle manufacturing business if they're not careful.''þþThat type of talk makes CAW President Buzz Hargrove bristle. In a speech at a CAW convention in Toronto last week, the former autoworker said the CAW's productive work force has earned its benefits.þþThe CAW represented 41,700 GM, Ford and Chrysler employees in 2004, down from 62,100 in 1987, the year it began bargaining separately from the UAW.þþA GM plants in Oshawa, Ontario, was the most productive plant in North America last year in hours per vehicle produced, according to the closely watched Harbour Report. Workers there took 15.8 hours to build a car, topping competitors like Nissan Motor Co. and Toyota Motor Corp.þþAnother factor in the CAW's favor is the vehicles it makes. Canadian plants make some of the most popular vehicles in North America, including the Chrysler 300C sedan and Chevrolet Silverado pickup. The Big Three certainly doesn't want a strike to jeopardize that supply, Robinet said.þþHargrove said the Big Three must take some of the blame for their falling U.S. market share, which has tumbled from 71 percent in 1990 to 58 percent in the first six months of this year.þþGM, the world's largest automaker, said its U.S. sales were up a modest 2.8 percent in the first half of 2005, and the company reported a $1.1 billion first-quarter loss. Ford's sales were down 3.8 percent for the same period while DaimlerChrysler's were up 5.3 percent, compared with an increase of 6.6 percent for Asian brands, according to Autodata Corp.þþHargrove also has questioned the strategy of boosting incentives to sell more vehicles. GM's U.S. sales jumped 41 percent in June, but only because the company launched a program that lets consumers buy vehicles at the employee discount rate. Ford and Chrysler followed with similar deals this month.þþ''We do not design the vehicles. We do not market the vehicles. We do not have any input into corporate decisions,'' Hargrove said in his speech. ''We just build the vehicles, and we do that well.''þþHargrove said the Big Three also are saving hundreds of millions of dollars each year on health care because of Canada's national health care system. According to data from the CAW, health care costs GM $1,500 per vehicle in the United States compared to $120 per vehicle in Canada.þþ''Are we looking for a fight? No,'' Hargrove said. ''Still, I say to the companies one more time, `Do not get your expectations too high.'''þþDaimlerChrysler says health care costs are a growing problem in Canada even with national health care. The automaker, which provides vision, prescription drugs, dental and other benefits on top of the national plan, says the Big Three's health care costs for active CAW workers grew 17.5 percent in Canada between 2000 and 2003 and now top $308 million a year.þþStill, that's a fraction of the billions of dollars the Big Three spend in the United States.þþ
Source: NY Times
