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And I'm Michele Norris.
It will not be business as usual at GM and Chrysler. With each new labor contract this fall, the U.S. automakers are bringing costs closer in line with foreign competitors such as Toyota and Honda. And they're doing so with the help of the United Auto Workers, a union that seems more focused on its own survival than on protecting past gains.
Coming up, we'll talk about the recent strikes and whether the tactic has had as much power as it once did.
First, NPR's Frank Langfitt reports.
FRANK LANGFITT: In yesterday's tentative contract, Chrysler got many of the things it says it needs to compete in the global marketplace. Like General Motors before it, Chrysler would be able to shift responsibility for retiree health care to the union. The company would also be able to hire thousands of new workers at lower wages. Chrysler pays 30 to 35 dollars more per hour in wages and benefit than its foreign competition. Analysts say the new contract could significantly narrow that gap.
Aaron Bragman works for Global Insight, a financial research firm.
AARON BRAGMAN: Well, I think that eliminating health care liabilities for the balance sheet is a really big step in getting what they need. They may not have everything that they need just yet, but I think that it's really taken a large step forward.
LANGFITT: Bragman says one reason GM and Chrysler are getting concessions is Ron Gettelfinger. He's president of the United Auto Workers. And he's seen as more pragmatic than some past leaders.
In recent weeks, Gettelfinger has been willing to trade away certain benefits for guaranteed work for his members.
BRAGMAN: Well, it seems that Mr. Gettelfinger - he's got a business degree. He's an extremely intelligent person. And going in to these talks, we understand that he's actually contracted with two different financial adviser firms to come in and help the UAW understand exactly where these automakers are in terms of their health and exactly what the UAW will need to give in order to secure that automaker's future.
LANGFITT: That sense of giving up some things to keep what you have is filtering down to ordinary workers.
Rod Hartsfield is 46 years old. He works at the Chrysler stamping plant in Sterling Heights, a Detroit suburb. He spoke outside his local union hall yesterday.
ROD HARTSFIELD: You know, job security is the biggest thing, you know? Of course, we want to be able to look off for those who've gone before us with our retirees, and the pensions and health care. What equally important is to know that we're going to have a job, you know, in the coming future, you know, so that we can provide for our families and be able to maintain our standard of living.
LANGFITT: But with car companies getting many of the concessions they want, they may now face more pressure to perform on product, quality and marketing. For years, the Detroit firm said generous union contracts kept them from competing with lower-cost foreign firms.
Dennis Virag runs an auto-consulting firm in an Ann Arbor. He says in the future, that argument may not hold.
DENNIS VIRAG: With the new settlements, the Big Three have no one to blame in the future. They are taking that all on their own shoulders right now.
LANGFITT: The union reached its deal with Chrysler yesterday afternoon. It came after a mysterious six-hour strike. The union hasn't said why it walked out. But one official said today it came down to employment. He said the union forced the company to protect jobs in parts-related operations. Next up at the negotiating table is Ford. Financially, it's the weakest of the Detroit Three. The company is in deep debt. Dennis Virag expects Ford will be asking the union for an even better deal.
VIRAG: They're going to be asking for major concessions. You know, certainly, they're going to look to get at least what General Motors and Chrysler have gotten. Ford, certainly, when you look at their market share declines, when you look at their reorganization effort, has very little that they could offer in terms of job security. Whatever they do offer may only be as good as the papers it's written on.
LANGFITT: Union members could begin voting on the Chrysler contract next week. The union has not said when it will approach Ford.
Frank Langfitt, NPR News, Detroit. Transcript provided by NPR, Copyright NPR.
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