The three big Detroit automakers will seek unprecedented concessions from the United Auto Workers union in contract negotiations, The Wall Street Journal reported in its online edition on Thursday, citing auto executives.
General Motors Corp., Ford Motor Co. and DaimlerChrysler AG’s Chrysler Group are looking to close a gap in labor costs of $10 billion a year compared with their leaner Asian rivals, according to the report.
None of the three automakers or the UAW was immediately available for comment.
One industry executive told the Journal the three companies were resolved to move jobs overseas if they could not reduce their U.S. labor costs.
In the past they have agreed to costly labor contracts, but this time the carmakers are united in believing they have no choice but to close the cost gap, according to the report.
The crucial round of contract talks with the UAW begins next month. A four-year deal on wages and benefits expires in September.
Separately, GM and bankrupt auto parts maker Delphi Corp. are near a deal with the United Auto Workers union that would provide a cash payout to Delphi workers in exchange for lower hourly wages, the Detroit News reported on Thursday.
GM would fund the program. An agreement could be completed within a week or so, helping Delphi to emerge from bankruptcy, according to the report.
The proposal would offer 4,000 UAW workers an unspecified one-time lump sum cash payment in return for accepting lower wages that could range from $14 to $18 per hour. Workers could also take the lump sum and accept early retirement or return to GM, the Detroit News said, citing people familiar with the talks.
A Delphi spokesman was not immediately available.
