UAW and car companies may negotiate overtime

Contract negotiations between the UAW and the "Big Three" were supposed to be over by September 14. That looks less likely as each day passes.

Several big issues remain unresolved. The largest is whether pension and health liabilities will be transferred off the car companies' balance sheet to a fund run by the UAW. This would cost over $60 billion, but may be desirable for the long-term financial health of Detroit car industry.

The UAW may try to get more job security for its workers in exchange for agreeing to take on the medical and retirement liabilities. Of course, Detroit does not want to guarantee jobs in an environment where it loses market share to the Japanese almost every month.

The possibility of a strike is not off the table. While the UAW management is trying to put on a calm face, many of its members are voting to authorize a strike. The benefits funding issue may be important to UAW management and the car companies.

The rank and file just want to keep their jobs.

Douglas A. McIntyre is a partner at 24/7 Wall St.

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