UAW Seeks Joint Big 3 Deal
UAW President Ron Gettelfinger is engaged in a frenetic shuttle
diplomacy between negotiation sites as he pushes bargainers to reach an
historic, simultaneous contract agreement between the union and
Detroit's automakers, according to people close to the talks from both
sides. "This has never been attempted before," said Sean McAlinden,
chief economist at the Ann Arbor-based Center for Automotive Research.
"He's trying to hack out a pattern (agreement) right there on the spot,
right there out of the president's office." Negotiations on a new pact
covering wages, benefits and job security for more than 300,000 workers
at GM, Ford, Chrysler, Delphi and Visteon continued late Tuesday with no
tentative settlement. With U.S. auto sales down 2 percent this year,
foreign rivals grabbing more market share, and profits under pressure,
Detroit automakers are seeking a contract that reduces fixed costs and
provides more operating flexibility at the factory level. Despite the
push to reach an early settlement, one analyst advises against falling
into the trap that doing so will be easy. "Anyone who thought this would
be a cakewalk for (the) Big 3 may be disappointed," wrote Morgan Stanley
analyst Stephen Girsky in a report to investors Tuesday. "However, the
business-like nature of the discussions remains a positive, in our
opinion."
(Source: The Detroit News)


CEO: Chrysler Has No Restructuring Plans
Chrysler does not plan new restructuring measures such as layoffs
despite losing more than $1 billion in the second quarter, and will look
to new models and productivity improvements to restore earnings, chief
executive Dieter Zetsche said Tuesday. Chrysler, like every car company,
"needs ongoing significant gains in productivity," said Zetsche. But for
the moment, he said, it doesn't need more of the job cuts that have
marked its three-year restructuring. "The significant difference between
the three years of turnaround and the years to come is, that, starting
now, we are starting to see the harvest of all the efforts we have put
into our product line," Zetsche said. "This is what gives us confidence
for our future competitiveness." Zetsche cited the launch later this
year of the new Dodge Durango sport utility vehicle and nine more
product launches next year in North America. The company was also
looking to make significant further gains in manufacturing efficiency,
he said.
(Source: The Associated Press)


GM Hopes to Decrease Use of Discounts on U.S. Models
General Motors Corp. Chairman and Chief Executive Officer Rick Wagoner
said a strengthening U.S. economy could allow GM to ease off discounts
on its U.S. models, although he and other senior GM executives attending
the Frankfurt Auto Show said GM would remain aggressive in the U.S. and
European markets. "Normally we took [the impact of] recessions in
volume. Now, we did not take the volume down. We took prices down," Mr.
Wagoner said in an interview. In past recessions, auto sales fell 30%
from peak to trough and then would rebound as the economy recovered, he
said. In the most recent slowdown, GM and other auto makers sustained
sales volumes by cutting prices. As the economy recovers, "maybe we get
some easing off of incentives. Does that happen with 2004 [models]? I
hope so," he said. GM is launching most 2004 models this month, and has
announced scaled-down discounts for many of its cars and trucks. "We'll
see how it goes," Mr. Wagoner said.
(Source: The Wall Street Journal)


For Ford, Luxury Matters
Ford Motor Co.'s European luxury unit Tuesday revealed three new
production cars and a concept vehicle aimed at reversing its flagging
fortunes. Ford created Premier Automotive Group to turn its four
European luxury brands -- Volvo, Jaguar, Land Rover and Aston Martin --
into a unit that would save money and eventually generate as much as
one-third of Ford's global profit by selling more high-profit cars and
trucks. But PAG has been a disappointment after losing $900 million in
2002 and $88 million in the first quarter of 2003. It showed signs of
improvement in the second quarter with a $166-million pretax gain on a
16-percent boost in revenue from the same quarter of 2002. The cars
introduced at the Frankfurt auto show will go a long way toward
determining PAG's success for several years. The new models include a
station wagon version of the Jaguar X-type, the new $146,800 Aston
Martin DB9 luxury sports car and the new Volvo S40 compact, which should
sell for around $21,000 when it debuts in the United States in March.
(Source: Detroit Free Press)