UPDATE 1-UAW vows to fight auto industry pressure for cuts


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By Jui Chakravorty and Poornima Gupta

DETROIT, March 27 (Reuters) - United Auto Workers union President Ron Gettelfinger said on Tuesday the union is not looking to strike, but kept the option open as the UAW prepares to negotiate a new contract with the auto industry this summer.

"Our union does not want to strike, but when employers act as if collective bargaining is a one-way street, not a two-way street, then we will do what we have to do," Gettelfinger told 1,500 UAW representatives from around the country gathered in Detroit for a two-day meeting.

The UAW president said these were "challenging times" for the industry as the union begins negotiations with Detroit's Big Three automakers -- General Motors Corp. , Ford Motor Co. and Chrysler Group -- this summer.

Gettelfinger said the outcome of a possible sale of Chrysler Group by parent DaimlerChrysler AG is "up in the air," but speculation around the sale has created apprehension among workers.

Gettelfinger said private equity and hedge funds are "circling overhead as never before" as these groups have recently bought distressed auto suppliers and are looking at Chrysler as a possible investment.

The main business of the UAW convention is to pass a resolution outlining the union's priorities.

The union said it would take a tough line in contract talks on job security and the protection of health care and pension benefits.

But the union, which has seen its active membership decimated by job cuts since the last contract was signed with the automakers in 2003, also said it could not afford to "stand idly by as industries and companies decline."

"UAW members will be challenged as never before to pursue alternative strategies to improve quality and productivity," the union said.

The current contract with U.S. automakers expires on Sept. 14, and analysts say the UAW faces intense pressure to offer givebacks on health care benefits that the automakers estimate add $1,000 to the cost of an American-made car.


In a draft resolution prepared before the start of the session and distributed on Tuesday, UAW officials acknowledged the "tough" bargaining environment the union faces.

"Many employers are likely to demand more wage and benefit cuts, threaten more plant and workplace closings, and attempt to erode more workplace protections," the union said.

On the hot-button issue of health-care costs, the UAW said it would continue to press for a system of universal health care in the United States while resisting "efforts by employers to escape health care and pension obligations by transferring risk to individual workers."

It said: "Employers and their political allies are attempting to create a false sense of crisis about the long-term viability of health care and pension programs."

The union, a traditional source of support for the Democratic party, also lashed out at the Bush administration for spending "the past six years rolling back workers rights."

The auto contract talks are being watched for their implications beyond the industry. The 72-year-old UAW has historically secured wage and benefit deals that set the highest standard for American blue-collar workers, including the first contracts with health benefits and paid overtime.

But taken together, the three Detroit-based automakers have cut more than 80,000 union jobs after losing a combined $16 billion in 2006.

Daimler has also begun taking bids for Chrysler, raising the risk that the No. 4 U.S. automaker will end up in the hands of private investors who will take a harder line with the UAW.

In the last round of contract talks in 2003, the UAW agreed to job cuts, plant closures and modest wage increases to protect relatively generous health-care and pension packages.



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