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UAW CONTRACT LIKELY TO PROVIDE SUBSTANTIAL WAGE HIKE

For autoworker Miguel Cardenas, raises in the next union contract will be like the chrome on a Cadillac.

"We make good money now -- I don't have a problem with it," he said on his way home from General Motors Corp.'s engine plant in Tonawanda. "Whatever they give, I take."

Autoworkers in Western New York and around the nation will see their raises accelerate under a national contract being negotiated with Detroit automakers, industry analysts say.

But the booming auto market, while providing the basis for wage increases, won't stem a gradual decline in jobs as work shifts to suppliers, the same experts said.

"The Big Three are definitely in one of the hottest auto markets they've ever seen," said Matthew Collins, industry analyst at Edward D. Jones & Co. in St. Louis. "They don't want anything to upset that."

The United Auto Workers national agreements, scheduled to be in place on Tuesday, affect about 12,000 Buffalo-area workers at General Motors, Ford and Delphi Automotive, GM's recently spun-off supply unit. A contract with DaimlerChrysler AG is expected to be complete by the deadline, with GM and Ford following.

Auto industry wages are already among this region's best. The transportation equipment sector -- chiefly automakers and their suppliers -- had an average pay check of $1,211 in July for a 46.4 hour week, according to the state Labor Department.

But a record year, with vehicles headed to beat 1998's sales of 15.5 million cars and light trucks, puts the UAW in position to win gains significantly ahead of inflation -- unlike the previous contract.

"I would expect them to get substantial wage increases for the first time in a long time," said Arthur Wheaton, professor at Cornell University's School of Industrial and Labor Relations.

Wheaton predicted pay increases of 9 percent over the three-year contract, with some of the pay coming in the form of a one-time bonus. Some Wall Street analysts have put first-year wage gains as high as 5 percent.

Under its 1996 contract, the UAW got raises totaling 6 percent over three years, plus a $2,000 bonus in the first year. That year a strike by the Canadian Auto Workers spread layoff ripples to Western New York.

Although it's no longer part of GM, Delphi Automotive -- including its Harrison Thermal Systems unit in Lockport -- will get an agreement similar to what GM negotiates. The component maker, which severed its last corporate ties with GM in May, employs about 6,100 at its Lockport headquarters and plant complex.

Automakers and UAW officials declined to comment on the contract prospects, saying the issues are subject to negotiations. But the two sides have already signaled some of their positions.

In a statement to members, UAW President Stephen P. Yokich said workers' wages have increased only 1.3 percent over time counting inflation, while salaries for top executives rose 109 percent.

"In the face of sustained record profits for the companies, it's hard to see why they wouldn't want to share their success with hourly workers," he said.

Some GM workers stopping at their credit union Friday said wages weren't their top priority.

"We're putting in a lot of hours -- they could use some more people," said Ron Laity Sr. of Holland.

The 29-year worker said he sometimes works over 60 hours a week on the plant's 4.3-liter engine line. While the overtime is lucrative, the workload can be daunting for a work force with many in their 50s.

Doug Dubois of Amherst would like to see better incentives to save for retirement within the company's 401(k) program.

"Nobody else is going to do it for you," he said.

While a rich contract will keep plants humming for major automakers, it could raise complications for Delphi Automotive, analysts said. As an independent company, Delphi is looking to bring costs down to compete with other suppliers, they said.

"It's not at all clear Delphi is going to be able to increase its business in North America" to offset losses of GM work, said Donald Smith, associate director for manufacturing systems at the University of Michigan Transportation Research Institute.

A guarantee of "lifetime employment" that GM is reportedly offering could complicate future contracts for Delphi if it applies to the company's hourly workers, Smith said.

"This is not the year for Delphi to get wiggle room" in its labor contract, he said.

Other observers dismissed the lifetime job guarantee as window dressing that's substantially in place already through the current agreement. The guarantee applies to workers with 10 years seniority, a group that will face heavy vacancies through retirement anyway, analysts said.

"With everybody working as hard as they can, there's no reason to think they're about to lay anybody off," Wheaton said.

Ford will be the toughest of the Big Three contracts and the most likely to spark a strike as the union mounts a challenge to the proposed spin-off of its Visteon parts unit.

"The UAW has stuck its spear in the sand" regarding Visteon, Wheaton said. The union may try to win sweeteners for the deal, but will be unable to halt the the spinoff if Ford is determined, he said.

Auto component supplier American Axle & Manufacturing Inc., whose UAW contract expires early next year, will be watching the automakers' contracts closely, experts said.

"I'm not sure there will be pressure on their wages" from the automakers' contracts, Smith said.

Spun off by GM in 1994, the Detroit-based company with 2,800 Buffalo-area jobs has maintained GM-style wages while gaining pay flexibility on newly created jobs.

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