The United Auto Workers union says it has made “much progress” in negotiating a new contract with General Motors (NYSE:GM) to replace the current deal on wages and benefits signed in 2007 and set to expire before midnight on Wednesday.
“We are confident that we can reach an agreement that will meet many of the goals we set at the beginning of negotiations,” said UAW Vice President Joe Ashton. General Motors, the nation’s top automaker, employs 49,000 union-represented workers. Ashton’s comments are the most upbeat to come out of the more intensive phase of negotiations that started last week.
Ashton says the union’s goal is to reach a tentative contract agreement with GM by tonight rather than face arbitration, but some observers expect negotiations at GM to extend beyond the deadline. “We believe that the negotiations will overshoot the deadline without going into arbitration or having a significant hindrance to production,” reads one Goldman Sachs research note. “In our opinion, UAW has no incentive to sign the contract ahead of the deadline as has been the case in almost all negotiations in the past.”
On Tuesday, Ford (NYSE:F) and the UAW agreed to extend their contract to allow for the union to reach an initial deal with GM or Chrysler (PINK:FIATY). Talks between GM and the UAW negotiating team broke off around 11 p.m. on Tuesday night, while talks continued at Chrysler late into the night.
The new contracts will set wages and benefits for roughly 113,000 workers for the next four years. While the companies are focused on keeping labor costs down, the UAW is pushing for more auto production jobs as the industry’s profits improve. Last week, unsubstantiated reports had the UAW also seeking signing bonuses of $8,000 to $10,000 for all of its members.
If an agreement is not met by the deadline, both the union and company teams will have to agree to extend the current contracts. Gm has about 49,000 union-represented workers, Ford has roughly 41,000, and Chrysler has about 23,150.