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UAW and Big 3 Kick Off Contract Talks

When representatives from the United Auto Workers and the Big 3 automakers exchange ceremonial handshakes this week, it will be the symbolic start of talks on a new labor deal.

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Ros Roberts | Stone | Getty Images

There will be a flurry of articles and reports with everyone saying the usual: "We're confident we can get a deal done and avoid a strike or arbitration."

But what are the odds that will truly happen?

It certainly could happen, but I wouldn't call it a slam dunk.

After watching the industry go through hell over the last five years, the business has changed, the economy has changed, but has the relationship/framework between the UAW and automakers changed?

At the end of the day, that's the issue.

Will everyone involved be willing to move towards a new form of compensation?

On so many levels, it makes sense to find a better way to have auto workers sharing in the profits when GM, Ford, and Chrysler are profitable, which they are right now. But for that to happen, the UAW must be willing to accept that some years, there may not be much a profit to share. Not a very appealing prospect. On the other hand, the automakers want to keep their hourly wage fixed costs within spitting distance of foreign competitors, so they are not crazy about a huge boost in hourly wage rates.

And against that backdrop, there is the question of guarantees for keeping some plants open. The automakers don't want to go down that route again after contracting in recent years. In the future, when the auto makers expand, they want to do it judiciously.

All of this means we should not expect these talks to go quickly or smoothly. That's not a knock on either side. It is a reflection of the fact the world, economics, and relationships have changed and all involved are trying figure out exactly where they should be for the next three years.

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