UAW: Ford and Chrysler are in strong financial positions

Jamie LaReau
Automotive News
January 7, 2008 - 4:51 pm ET

UAW President Ron Gettelfinger

DETROIT -- UAW President Ron Gettelfinger says Chrysler LLC and Ford Motor Co. are in healthy financial positions to weather economic hardships.

UAW forecasters predict the first six months of the year will be “pretty tough,” especially with gasoline prices predicted to rise to $3.75 a gallon, said Gettelfinger, in a joint interview here today with Automotive News and Crain’s Detroit Business.

“Who would have predicted last year that we would see the slump in housing that we did? I sort of want to be optimistic,” Gettelfinger said. “I don’t know where this gasoline is going to level off. That’s a real concern to me. I hear a lot of people talk about when they stop at a service station to fill up their tank, they pay out $60 or $70. That’s a lot of money for gasoline.”

Gettelfinger stopped short of saying the nation is headed toward a recession, but when asked how Ford and Chrysler are positioned to handle a decline in the economy, he said: “I’m very comfortable with where we’re at, especially at Ford. I feel very, very good about Ford.”

Gettelfinger said Chrysler is well positioned financially under owner Cerberus Capital Management LP. Cerberus acquired its 80.1 percent stake in Chrysler in early August.

“They’ve got the money, they’ll do the investment, they’ll put the money in research and development,” Gettelfinger said. “They’re not sitting on their laurels up there. I think they’ve got some surprises coming down the road for the industry, and they’re going to be a player.”

On other issues, Gettelfinger said:

-- He expects savings in the new UAW contracts with the Detroit 3 to go back into investments in U.S. plants. Concessions granted by the union to the automakers last fall could save an estimated $1,000 per vehicle, analysts have said.

For General Motors, that means $3.8 billion a year. Ford could save $2.4 billion, and Chrysler could save $2.0 billion -- if the automakers maintain sales volume and market share.

“We expect those savings to be put right back into American operations,” Gettelfinger said.

-- The UAW will fight in court to block $13.6 million in combined cash bonuses proposed for Delphi Corp. Chairman Steve Miller and CEO Rodney O’Neal. He called the proposed payouts “absurd and ludicrous.”

“I’ve said it before and I’ll say it again. They are pigs slopping at the trough,” Gettelfinger said. “We will object as strenuously as possible in court.”

Delphi is hoping to emerge from Chapter 11 protection by the end of March. It requested $8.3 million for Miller and $5.3 million for O’Neal in a recent court filing.

-- The UAW is not negotiating a broad organizing agreement with supplier Magna International Inc.

Last fall the Canadian Auto Workers reached an agreement with Magna that will allow the union to organize the Canadian company’s plants there. Gettelfinger said that although the UAW had preliminary discussions with Magna a few years ago, such an agreement is “not on the front burner” in the United States.