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High Stakes for Both Sides in Auto Talks


Tough contract talks began today in Detroit. The city's three big carmakers are facing off against the United Auto Workers and the stakes may be higher than ever. The automakers are taking a beating from lower cost foreign rival such as Toyota. Observers say if they can't slash what they spend on labor and health care, the future is bleak.

NPR's Frank Langfitt reports.


FRANK LANGFITT: It started as it always does, with a ceremonial handshake for the cameras.

Ron Gettelfinger, the union president, and Tom LaSorda, Chrysler's chief, were all smiles. But at a news conference afterward, the body language suggested what everybody in the room knew - the autoworkers were on the defensive. Behind Gettelfinger stood his team of negotiators shoulder to shoulder, like the frontline of a football team. Framing them was a UAW banner that read "Fighting for America's Future."

Mr. RON GETTELFINGER (UAW President): We're going in to these negotiations looking after the very best interest of our active and retired members.

LANGFITT: The companies, on the other hand, will be looking at things like high health care costs for retirees. The automakers spend billions on it every year. One solution the companies are considering: put money in a health care trust fund and let the union manage it. LaSorda wouldn't say exactly what he wants out of these talks, but the status quo is not an option.

Mr. TOM LASORDA (CEO, Chrysler): Today, the domestic auto industry faces unprecedented challenges and we can no longer afford to conduct business as usual. Our circumstances demand that we rethink our approach to our business and achieve true change.


LANGFITT: Much of the conversation in Detroit revolves around the union's famously rich benefits and how much less companies like Toyota have to spend on their workers. But after the news conference, John Franciosi, Chrysler's chief bargainer, said the real problem is America's broken health care system.

JOHN FRANCIOSI (Chief Negotiator, Chrysler): Look, the, the fact is is that we're competing against Asian automakers who had these subsidies in their, in their policies back home. And that puts us, you know, at a significant, competitive disadvantage.

LANGFITT: On the factory floors here in Detroit, union members are confused and anxious about negotiations. With everything on the table, some worry they could have to pay more out of pocket for healthcare or won't have enough for retirement. Helen Sheppard(ph) works with UAW Local 22. She spoke during a lunch break outside a pizza parlor near GM's Cadillac plant.

Ms. HELEN SHEPPARD (UAW Local 22 worker): My biggest concern is pension, because I wouldn't be young after 30 years, and I would be nearly like 52-years-old, and I don't want to have a pension that's just dwindling away while I have to turn around and look for another job.

LANGFITT: Many workers are coming around to the idea that they will have to give some things up. John Guset(ph) works as an electrician in a Chrysler plant that makes the Sebring. Originally from Romania, he has worked at the company for more than two decades. He spoke at a coffee shop after work.

Mr. JOHN GUSET (Chrysler electrician): There will be some concessions. I believe this is how I see it right now. But I hope they will be reasonable. That's - this is how I feel, and Mr. Gettelfinger will see it the same way.

LANGFITT: Do you think he will?

Mr. GUSET: I got to wait and see.

LANGFITT: The union's negotiations with Ford and General Motors open Monday. The talks will run for the next two months. The current contract expires September 14th. It's around then that people expect both the company and the union to make some wrenching decisions about their future.

Frank Langfitt, NPR News, Detroit. Transcript provided by NPR, Copyright NPR.