UAW Set for Talks with Financially Strapped Ford

The United Auto Workers unions is set to begin final negotiations with Ford now that its contracts are ratified at Chrysler and General Motors. But negotiations could be especially tough. Ford, which lost $12 billion last year, is seen as financially weaker that the other two carmakers.

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RENEE MONTAGNE, host:

And the United Auto Workers approved a new contract with Chrysler over the weekend. Up next: Ford. This week, the union may start negotiations with the weakest of Detroit's Big Three.

NPR's Frank Langfitt reports.

FRANK LANGFITT: Ford lost more than $12 billion last year and it borrowed nearly twice that. As collateral it put up assembly plants, even its famous blue oval logo.

Gary Chaison teaches industrial relations at Clark University in Worcester, Massachusetts. He calls Ford the industry's sick old man.

Dr. GARY CHAISON (Clark University): It's been very complacent, and it's been selling the same cars for a number of years, but people would always buy those. They've borrowed huge amounts of money and they are essentially burning through their cash.

LANGFITT: GM and Chrysler have already won big concessions following short strikes. The union will take over retiree health care. The companies will be able to hire thousands of new workers at half pay, creating a two-tier wage system. The firms say they need those breaks to compete better with the likes of Toyota and Honda. But Ford may need to cut costs even more so it can revamp its product line.

Dennis Virag is an auto consultant in Ann Harbor.

Mr. DENNIS VIRAG (Automotive Consulting Group): Consumers are not looking to buy vehicles that were designed three to five years ago. They are looking for the latest designs, for the latest features, and that takes continuous investment and product development.

LANGFITT: But Ford could face fierce resistance. Gary Walkowicz repairs F-150 pickup trucks at a plant in Dearborn, Michigan. He's also a member of Soldiers of Solidarity, a union dissident group.

Mr. GARY WALKOWICZ (Soldiers of Solidarity): I believe this contract would be devastating to the future of autoworkers in this country. I think the two-tier wage system could bring down, eventually, the standard of living for all autoworkers, and it's a terrible contract.

LANGFITT: Union President Rod Gettlefinger has said he expects to get a deal with the company and avoid a strike.

Frank Langfitt, NPR News.

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