By Tom Brown
DETROIT, Sept 17 (Reuters) - General Motors Corp. and the United Auto Workers were locked in contract talks early on Wednesday, long after the union reached tentative deals with Ford Motor Co. and Chrysler that call for plant closings and thousands of job cuts.
"We continue negotiations on new contracts. There's nothing to report publicly at this time," GM spokesman Tom Wickham said shortly before midnight Tuesday.
He did not elaborate, but an industry source close to the talks said earlier that the biggest remaining issue between the UAW and GM, the world's largest automaker, involved operations at auto parts supplier Delphi Corp. , a GM spinoff.
Existing labor contracts between Detroit's Big Three automakers and the UAW, covering more than 760,000 current and retired workers and their spouses, expired on Sunday. Under terms of Delphi's spinoff in 2000, it is subject to GM contract terms in the 2003 deal as well.
Among other issues, union sources said GM and Delphi were seeking to match or improve on a deal under which Visteon Corp. , a former Ford unit and still its largest auto parts supplier, will be able to contract new workers at sharply lower wages than existing employees.
The labor talks come against a background of dwindling profits at the Big Three, slipping market share and record-high incentives. The Chrysler unit of DaimlerChrysler reported a surprising operating loss of $1.1 billion in the second quarter and Ford has lost nearly $6.5 billion over the past two years. GM has been profitable, but its earnings have slumped.
UAW President Ron Gettelfinger said late on Monday the union reached a new four-year deal with Ford and Visteon. Ford Chairman and Chief Executive Bill Ford Jr. said the tentative contract dovetailed with his company's plans to close four U.S. plants and cut jobs to return to sustainable profitability.
AGING PLANTS, MOUNTING COSTS
The union's deal with the Chrysler, announced just past a midnight deadline on Sunday, will allow the automaker to sell or close up to seven underperforming U.S. auto parts plants over the next four years and cut 9,000 or more jobs, sources familiar with the agreement told Reuters.
GM has not revealed any plans to cut factory jobs, but it also has several aging and inefficient assembly plants. GM also faces mounting pension and health care costs for its roughly 117,000 active workers and nearly 300,000 retired workers and their spouses covered under UAW contract.
Delphi is the leading auto parts supplier globally, and since its spinoff from GM, it has shipped thousands of manufacturing jobs overseas and become the leading private sector employer in Mexico.
The UAW had pressed to reach an agreement with all of the Big Three automakers by Sunday's midnight deadline.
The Chrysler deal calls for roughly a doubling of blue-collar co-payments for prescription drugs, lower company contributions to pension plans for hourly workers and total pay hikes of about 5 percent, versus nearly 13 percent under the life of the previous four-year contract, union sources said.
But that may not be enough to satisfy the holders of shares in the Big Three automakers, as the companies fight a relentless assault on their U.S. market share from nonunion foreign carmakers led by Toyota Motor Corp. Ltd.
"We believe a contract with steep labor concessions is the sign of a troubled core industry, not 'good news' for investors," Goldman Sachs analyst Gary Lapidus said in a research report.
(Additional reporting by Michael Ellis, Justin Hyde)