Car Talks Set to Start

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Critical contract talks between Detroit's struggling automakers and the United Auto Workers are set to begin on Friday, the UAW said Tuesday.

The ceremonial opening handshake between union officials and negotiators for Chrysler will take place Friday morning at Chrysler's headquarters in Auburn Hills.

Similar events involving Ford Motor Co. and General Motors Corp. will take place on Monday, the union said in a statement.

Although the formal openings now have been set, informal talks have been under way for several months. The national contract between the UAW and the automakers expires in September, and industry analysts have characterized this year's negotiations as key to the automakers' survival.

All three companies have said they would like to cut or eliminate what they say is a $25 to $30 per hour labor cost disparity they have with their main Japanese rivals, Toyota Motor Corp. and Honda Motor Co.

Ford, according to its annual report, paid an average of $70.51 per hour in wages, pension and health care costs for hourly workers last year. GM's annual report says its labor costs average $73.26 per hour, while the Chrysler Group's costs average $75.86.

All three will seek to reduce costs to around $48 per hour, about the average hourly cost incurred by Toyota, Honda and Nissan Motor Co., company officials have said.

The costs then would be comparable to the Asian automakers, who pay similar wages but have far lower pension and health care costs and make more than $1,000 more per vehicle than the three Detroit automakers.

The UAW has picked up more of the share of health care costs at Ford and GM in the past two years, and it is negotiating with Chrysler for a similar deal. The union also has agreed to many plant-by-plant work rule changes to make the companies more competitive.

Analysts have said all three automakers need further labor cost cuts in order to become profitable in the U.S.

But UAW President Ron Gettelfinger recently said the union is not heading into the negotiations in a "concessionary mode."

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