The United Auto Workers union looks set to announce approval of its labor contract with General Motors Co
Ratification of the GM deal, which includes bonuses instead of hourly wage increases, would clear the way for the union to complete talks with the automaker's crosstown rival, Ford Motor Co
The UAW had indicated a deal with Ford could yield a proposed contract this week, although an update for union members by Ford negotiators on Tuesday night said only that talks continued, and there were no major developments to report.
Voting ends Wednesday on the GM contract, which would be the first for 48,500 GM hourly workers represented by the UAW since the automaker's 2009 bankruptcy and restructuring.
GM executives have set a conference call with Wall Street analysts for Wednesday afternoon to explain the financial implications of the contract for the first time.
The deal would add or save more than 6,000 U.S. factory jobs, raise wages for entry-level employees and pay each worker at least $11,500 in bonuses over the four years.
The terms also would leave GM's break-even point unchanged and allow the automaker to tackle the risk of its underfunded pension plan, one of the few issues left unaddressed by the restructuring directed by the Obama administration.
When we went into this labor negotiation, we were very focused on that, GM Chief Executive Officer Dan Akerson told a conference in New York on Tuesday. We could not do anything to negatively bias our break-even point.
UAW President Bob King joined the Ford talks this week, and the focus shifted to the tough economic issues.
Teams of negotiators for the union and Ford, the only U.S. automaker to avoid bankruptcy, have been meeting for about two months. The two sides typically address financial issues in the final stages of negotiations.
The union began an intense focus on Ford last week, a day after failing to finalize a deal with Chrysler Group LLC. It has extended its contract with the Fiat SpA
Observers are interested in the extent that the UAW will adjust contract terms to the different financial positions of the three Detroit automakers.
While UAW officials in the Ford talks said on Monday they expected to have good news for our membership by the end of the week, discussions at Chrysler, the smallest and most fragile of the Detroit automakers, are progressing much more slowly. Those talks continued on Wednesday, a Chrysler spokeswoman said.
Chrysler, which nearly collapsed two years ago, is still executing its own financial turnaround and trying to change public perceptions of its vehicle lineup. The company emerged from bankruptcy protection with a debt load that included $7.6 billion in government loans.
In May, Chrysler repaid those loans through a refinancing that helped cut its interest payments, but effectively swapped government loans with private ones.
As a result, Chrysler is eager to hold down its fixed costs beyond the 2015 expiration of the deal now being negotiated.
Last week, Chrysler CEO Sergio Marchionne told reporters in Italy that workers should not expect the package proposed at GM, calling it a completely different entity from his company.
As of Wednesday morning, at least 28 of the about 50 UAW locals for GM plants had voted for ratification, while three had voted against it, according to Reuters interviews and a tally by a union dissident group.
Locals reporting results on Wednesday morning included the Lordstown, Ohio, assembly plant, where 74 percent of a large turnout backed the deal, and the Lake Orion plant near Detroit, where 56 percent voted yes. Lake Orion is the GM plant with the most entry-level workers, who earn about half the pay of traditional workers.
(Reporting by Ben Klayman in Detroit; Editing by Lisa Von Ahn)