Ford, Chrysler veer from GM

Ford Motor Co. and Chrysler LLC are seeking contracts with the United Auto Workers with key differences from the deal the union reached with General Motors Corp., according to people close to the companies.

UAW President Ron Gettelfinger has yet to pick Ford or Chrysler as the next target for negotiations, but both automakers are anxious for deals that are less expensive or restrictive than the four-year pact that GM agreed to Sept. 26.

Financially struggling Ford is expected to push the UAW to accept a lower level of funding for a health care trust for its retirees, said people familiar with Ford's strategy.

Newly private Chrysler has other concerns, including getting health care concessions that GM and Ford received in 2005 and avoiding commitments to put specific new products in its U.S. assembly plants.

GM's 73,000 workers are expected to finish voting on their new contract by Wednesday; then negotiations are likely to accelerate at Ford or Chrysler -- or possibly both companies simultaneously.

Industry experts believe the two automakers will press the UAW to deviate from the deal reached at GM after marathon bargaining that culminated in a dramatic two-day national strike.

"The deal that GM got was a good one for GM, but it doesn't appear applicable for the other two," said Aaron Bragman, an analyst with research firm Global Insight.

Ford and Chrysler have been operating under open-ended contract extensions since their current UAW deals expired Sept. 14. Neither company has engaged in significant talks with the union since. Some lower-level bargaining has taken place at Chrysler this week, but no talks have been reported at Ford.

Still, both automakers are gearing up for potentially tough bargaining on how to adapt GM's agreement to fit their needs.

Ford needs generous deal

GM is shifting $50 billion in retiree health care costs to the union through a company-financed trust that would be controlled by the UAW. At Ford, negotiators are expected to push for a larger discount on its $21 billion obligation to retirees than the 70 percent level that GM agreed to put into a voluntary employees' beneficiary association, or VEBA, people close to the company said.

Ford also wants more restrictions placed on its jobs bank program, which continues to pay idled workers.

"As the details emerge, this is not looking like a very attractive deal," said Bradley Rubin, an analyst with BNP Paribas.

Ford Motor Executive Chairman Bill Ford Jr. said Wednesday that the automaker is prepared to accept the broad framework of the GM contract. "(The deal) is certainly something we can work with," he told reporters after a public appearance in Chicago.

But after losing $12.6 billion last year, Ford is in worse financial shape than GM. Officials at some UAW locals representing Ford workers said national union leaders have hinted that the Dearborn automaker needs a more generous deal than GM.

One analyst predicted "contentious" negotiations at Ford over the VEBA funding. "It appears there will be a fundamental disconnect between what Ford needs and what the UAW will give," said John Murphy of Merrill Lynch.

Chrysler seeks '05 concessions

The issues at Chrysler are complicated by its recent change in ownership and prickly relationship with the UAW.

Last year, the UAW refused to give health care concessions to Chrysler after agreeing to them at GM and Ford. Gettelfinger said the primary reason was the profitability of Chrysler's parent company, the German automaker DaimlerChrysler AG.

But losing out on the concessions -- estimated at a $300 million annual savings for Chrysler -- was then cited as a key factor in DaimlerChrysler's decision to sell the American automaker.

In August, Chrysler was acquired by private-equity giant Cerberus Capital Management LP. People close to Chrysler say the new owner is determined to win the 2005 concessions in the contract talks.

"Getting what Ford and GM got in 2005 has to be a top priority in this contract for Chrysler," Global Insight's Bragman said.

Chrysler is also said to be balking at a key provision of the GM agreement on UAW job security.

In its deal, GM made product commitments to 16 of its U.S. assembly plants. People familiar with the GM talks said the guarantees were critical to reaching an overall agreement and ending the strike.

Chrysler, in the midst of re-evaluating its product portfolio, is reluctant to make any specific commitments that could reveal its future vehicle lineup, according to sources familiar with its strategy.

Efforts by Chrysler and Ford to alter the contract set by GM will be resisted by Gettelfinger, who said in July that he expected all three Detroit automakers to adhere to pattern bargaining.

Similar efforts in previous contract years failed as the companies signed virtually identical deals. "It's going to be interesting to see how much different they can tailor their contracts," Bragman said. "It's a different ballgame today.

The UAW represents 59,000 Ford workers and 49,000 at Chrysler.

"We're just waiting in the wings for our turn," said Daniel Bennett, an official at UAW Local 122, which represents workers at a Chrysler stamping plant in Ohio.

Detroit News Staff Writer Sharon Terlep contributed to this report.