GM, UAW launch bargaining with show of harmony

DETROIT (Reuters) - General Motors Co and the United Auto Workers on Monday kicked off bargaining that will determine labor costs for the U.S. operations of the Detroit Three with a show of harmony that extended to the blue, open-collar shirts worn by officials on each side.

UAW President Dennis Williams and GM Chief Executive Mary Barra staged the first of three ritual handshakes that formally launch bargaining to establish master labor agreements for about 139,000 U.S. factory workers at GM, Ford Motor Co and Fiat Chrysler Automobiles NV.

In the past, the union has usually picked one of the Detroit Three to negotiate the lead agreement in a contract cycle and then pressed the other two to follow it. This so-called pattern bargaining has been weakened during the past 20 years because a growing number of U.S. auto plants run by foreign companies are not unionized, and so are not part of any UAW wage and benefits pattern.

The automakers are flush from a robust recovery in the U.S. market since GM and Chrysler went bankrupt in 2009. But all three are concerned that rising healthcare and pension costs could undermine the competitive gains made over the four-year life of the contract that expires in September.

UAW President Dennis Williams said at Monday's event that he wants to "bridge the gap" separating recently hired UAW workers, who make $16 to $19 an hour, from veterans who make as much as $28 an hour. Some UAW workers at the big automakers "are not part of the middle class as they should be," Williams said.

However, Williams said he would consider it a "failure" if the union had to call a strike at GM or the other automakers to secure a contract, and when asked if everyone could come out of the bargaining happy, replied: "Yes."

"I'll second the 'Yes,'" Barra said.

Barra, Williams and the UAW's chief negotiator at GM, Cindy Estrada, declined to discuss specifics of the issues they will be hammering out, including healthcare, pensions and whether to restructure the current two-tier wage system.

Barra, Williams and their respective subordinates were dressed in blue, open-collar dress shirts. Management's shirts were a slightly lighter shade, but there were no neckties in evidence on either side.

Williams sidestepped comment on Ford's announcement last week that it plans to move production of its Focus small car out of a factory in Michigan by 2018. Union officials have said the car is likely going to Mexico. Ford has said only that the plant's future will be an issue during the contract talks. Williams said he is always concerned when a company invests outside the United States.

Barra said she has "no plans to change" a decision to produce the Chevrolet Sonic small car at a factory north of Detroit.

(Reporting by Joe White; Editing by Dan Grebler)