UAW chooses Fiat Chrysler as target in contract talks - Yahoo News

 

DETROIT (AP) — The United Auto Workers union said Sunday that it chose Fiat Chrysler as its target company in ongoing contract negotiations with Detroit automakers.

the focus of bargaining and could be hit with a strike if negotiations stall. A deal with FCA will also set a general pattern for contracts at General Motors and Ford.

All three companies officially kicked off bargaining for new four-year contracts in July. The current contracts expire Monday but likely will be extended. The contracts cover around 140,000 U.S. factory workers.

In a statement, UAW President Dennis Williams said all three automakers are "working hard" to reach an agreement and will continue negotiating even as the UAW turns its focus to FCA. FCA confirmed its selection but said it would have no further comment.

Kristin Dziczek, director of the industry and labor group at the Michigan-based Center for Automotive Research, says the choice of FCA — the smallest and least profitable of the Detroit Three — signals a different attitude at the UAW, which used to go after the most profitable automaker during negotiations.

"This is the recognition that the union has had for a while, that you can't destroy the companies and still have jobs," she said.

Still, this year's talks were expected to be the most contentious in years because all three companies are healthy and making money. The union wants a piece of the profits in the form of hourly pay raises for longtime workers who haven't had one in a decade.

The UAW also wants to close the wage gap for entry-level workers, who make about half the $29 hourly wage of veteran employees. The wage gap benefits FCA the most, since 45 percent of its hourly workers make entry-level wages. Only around 20 percent of workers at Ford and GM make the lower wage.

Dziczek said the UAW might have chosen FCA because its CEO, Sergio Marchionne, has said he wants to eliminate the wage gap.

But automakers also want to cut labor costs to stay competitive. FCA is the only one of the Detroit Three whose U.S. labor costs are lower than foreign competitors like Toyota; Ford and GM think that's an unfair advantage and want to be on par with FCA, Dziczek said.

All three companies also want to stick with profit-sharing instead of increasing hourly labor costs. During the past four years, workers have gotten annual profit-sharing checks; at FCA, those bonuses totaled $9,000 per worker.

Williams and Marchionne, who greeted each other with a hug as the negotiations began in July, both say they would consider it a failure if they can't reach an agreement and workers strike. Workers at FCA — known as Chrysler before its 2009 merger with Fiat — went on a seven-hour strike during contract negotiations in 2007 but were prohibited from striking in 2011 under terms of a government-funded bankruptcy

UAW chooses Fiat Chrysler as target in contract talks - Yahoo News

GOP tax proposals tilt to rich despite populist rhetoric - Yahoo News

 

DENVER (AP) — Jeb Bush went to Detroit and talked about leveling the playing field. Marco Rubio wrote a book about helping the working class. Rand Paul is promising to expand the Republican Party beyond its traditional base.

Yet all three Republican presidential candidates have offered tax proposals that would, for reasons such as nomination politics and tax rate realities, benefit overwhelmingly the wealthiest.

In doing so, they have drawn criticism from Democrats who call it proof that the GOP's eventual nominee will mainly try to help the rich.

Even some conservatives expressed concerns after Bush released his proposed tax cut this past week. Then there was the analysis Thursday from the Washington-based Tax Foundation that concluded his plan would initially help the top 1 percent of earners 10 times as much as it would those in the bottom 10 percent.

"Republicans should be countering the caricature of themselves as slavishly devoted to the interests of rich people and corporations, not playing into it," according to an editorial in the conservative National Review. The magazine nonetheless praised Bush's effort to reduce income and business tax rates.

The trio's tax plans do contain elements aimed directly at middle- and working-class voters. Rubio proposes to expand the child tax credit and Bush wants to double the Earned Income Tax Credit, which is designed to help the working poor.

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But experts note that any broad income tax cut inevitably will benefit the rich more than anyone else, because they pay much more in federal income taxes than the middle class or poor.

About 40 percent of the country does not pay federal income tax. The top 1 percent of earners pays about 35 percent of the income tax.

"It is a mechanical problem," said Howard Gleckman of the Tax Policy Center, a joint project of the centrist Brookings Institute and left-leaning Urban Institute.

"If you start from the place where any tax plan has got to cut tax rates, you start with a plan that is already regressive and it becomes challenging and complicated to ameliorate that."

Michael Strain of the conservative American Enterprise Institute said Republicans have good reason to push for across-the-board cuts, despite the inevitable benefit to the wealthy.

"There's a genuine concern on the part of conservatives about economic growth and having tax code that fosters economic growth because of a belief that you need a growing economy to help everyone in the country," Strain said.

John Cogan, a Stanford economist who served in the Reagan administration and consulted on the Bush plan, argued that the tax reductions can help cure the inequality that critics contend they exacerbate. "Economic growth is absolutely essential to reducing the degree of inequality," Cogan said.

That's how Bush, a former, Florida governor, has tried to sell his plan. On Thursday, he brushed aside Democratic criticisms that the proposal was a giveaway to his wealthy donors and could increase the deficit, under his own supporters' estimates, by more than $3 trillion.

The U.S. must get back to "high, sustained economic growth," Bush said during a CNN interview. "We need to boost people's spirits by giving them more money to be able to make decisions for themselves."

Bush's plan condenses seven different brackets to three — 28 percent for top earners (who are now taxed at as high as a 39.6 percent rate), 25 percent and 10 percent for families making up to $87,000.

He would drop the corporate rate from 35 percent to 20 percent. To help middle- and working-class families, he would double the standard deduction and raise the Earned Income tax Credit.

Bush surprised observers by pledging to eliminate a tax break that benefits investment managers — a small but symbolically potent change to a Wall Street benefit that comes weeks after rival Donald Trump called for such a move.

Florida Sen. Rubio wrote a book in December outlining proposals to help low-income and middle-class families.

In February he signed on to a sweeping tax proposal that does not cut top rates as much as Bush's plan but does eliminate taxes on investment income. That would slash federal tax bills for many of the wealthiest in the country.

Paul, a Kentucky senator, followed with a proposal to drop the tax rate to 14.5 percent across the board, which analysts argue may be an even bigger windfall for the rich.

Conservative commentator Ramesh Ponnuru wrote in a column Thursday that the GOP should look to cutting other levies, like the payroll tax, which fall the heaviest on lower- and middle-income laborers. He said the GOP tax cut plans might end up being compared to Mitt Romney's in 2012, which a majority of voters thought helped the rich, according to exit polls.

GOP tax proposals tilt to rich despite populist rhetoric - Yahoo News