DETROIT/MONTREAL (Reuters) – The United Auto Workers union has summoned local officials representing some 26,000 Chrysler Group LLC workers to Detroit as contract talks with the No. 3 U.S. automaker near a turning point.
Chrysler Chief Executive Sergio Marchionne said on Friday that he expected bargaining on a new four-year deal on wages and benefits to intensify over the next three to four days.
Separately, the UAW summoned union presidents representing local bargaining units to Detroit for a Monday update on the contract talks, a person briefed on the plan said.
Typically the UAW leadership only summons the bargaining council representing to meet when they have a tentative contract to present to local officials.
But the union's talks with Chrysler have been the most strained of its contract talks with any of the Detroit automakers in the current round of negotiations, and there was no indication of new progress on Friday.
That left open the possibility that UAW President Bob King may want to brief local union presidents on the sticking points in talks, and the risk that the negotiations are deadlocked and head to arbitration, the person said.
Chrysler had no comment. The UAW could not be reached to comment.
UAW Vice President General Holiefield, who is leading the negotiations with Chrysler, thanked Chrysler workers for their patience in an online posting earlier on Friday.
Talks between the two sides have been underway since July but stalled last month over Chrysler's push to seek a more concessionary labor deal than the union was willing to give its larger rivals, General Motors Co and Ford Motor Co.
"Progress has been made. However, key issues are still being discussed," Holiefield said in a memo.
Separately, Marchionne, speaking to the Italian Chamber of Commerce in Montreal, said he expected Chrysler to reach a deal with the union and avoid arbitration, but he challenged the precedent set in contract agreements with General Motors Co and Ford Motor Co.
Earlier this week, the UAW and Ford reached a tentative four-year contract that allows veteran workers to get at least $16,000 in bonuses. Last week, UAW workers at GM ratified a slightly less generous labor contract.
Chrysler, the smallest of the Detroit automakers, is under more pressure to hold the line on costs because its finances are weaker.
"Some of the deals that we've seen being signed between Ford and GM (with the UAW) are probably, given Chrysler's own predicament... overly generous," Marchionne said on Friday.
Chrysler, which nearly collapsed two years ago, is still executing its turnaround and trying to change public perceptions of its vehicle quality.
The company emerged from bankruptcy with a debt load that included $7.6 billion in government loans. In May, Chrysler repaid those loans through a refinancing that helped reduce its interest payments.
As a result, Chrysler is eager to hold down its fixed costs beyond the 2015 expiration of the deal being negotiated, people involved in the talks have said.
Chrysler's contract with the UAW expired on September 14, but both sides extended the deal to October 19.
As part of Chrysler's bankruptcy restructuring in 2009, workers gave up the right to strike and agreed to binding arbitration if a deal could not be reached.
"The intent is to try and get to a deal without going to arbitration," Marchionne said. "I think we're approaching this with the best of intents."
Marchionne, who is also the CEO of Chrysler's majority owner, Fiat SpA, has sparred with UAW leadership. Last month, he sent a scolding two-page memo to the UAW's King for missing a key negotiating meeting.
(Reporting by Bernie Woodall and Deepa Seetharaman in Detroit, Allison Martell in Montreal, Writing by Kevin Krolicki; Editing by Daniel Magnowski)
NEW YORK (Reuters) – Investors tiring of the euro zone's debt crisis dragging the market all over the place are hoping to focus on something else next week -- earnings.
But will third-quarter results be enough to drive the S&P 500 higher? Or will Europe's woes get in the way?
The unofficial start of earnings season begins on Tuesday, when Dow component Alcoa Inc (AA.N) reports third-quarter results after the close of trading.
The earnings and guidance that may follow could give investors some clues on the health of the global economy, including any impact the euro-zone debt crisis has had and might continue to have on profits.
But even if earnings paint a rosier picture than anticipated, stocks may face a stiff test in climbing much further, as analysts pointed to the declining 50-day moving average as a key resistance point that could limit gains. That level now sits around 1,178.
This week's sharp gains were built on improved hopes that European officials will get a handle on the euro-zone debt crisis. That fed a massive bout of short-covering as those betting against stocks were forced to buy shares to avoid losing money.
The benchmark S&P 500 index (.SPX)(.INX) rose 2.1 percent for the week, buoyed by a 6 percent jump mid-week, as it appeared plans in the euro zone to get a grip on the debt crisis were moving forward. The region remains a wild card, which could cause any gains to quickly vanish.
"For the next three weeks, in this country, earnings will be the focus and the subplot is going to be Europe -- Europe is always going to be just under the surface," said Ken Polcari, managing director at ICAP Equities in New York.
"But if all of a sudden in the middle of next week, some catastrophe happens in Europe, the focus is immediately going to be headline driven and goes back to Europe."
Other companies expected to post quarterly results next week include PepsiCo Inc (PEP.N), tech giant Google Inc (GOOG.O), JPMorgan Chase & Co (JPM.N) and toy maker Mattel Inc (MAT.O).
KEEPING THE BAR LOW
Clouding the picture for profits is the fact that many earnings estimates have been trimmed by analysts in light of the turmoil in Europe, a staggering global economy and other events which resulted in a more cautious forecast.
"You've got to remember what was going on in July with the debt-ceiling crisis, credit default -- companies were not willing to go out on a limb and make any big expectations," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co. in San Francisco.
"So they were conservative going in, and we have not seen a whole lot of downward revisions, which suggests companies are probably going to be able to make those numbers."
The economic calendar for next week includes the FOMC minutes from the two-day meeting in late September, along with import prices and retail sales for September, in addition to the preliminary reading on October consumer sentiment from the Thomson Reuters/University of Michigan surveys.
Economic data of late has been better than expected, helping to quell fears that the economy was headed for a double-dip recession. Once again, that leaves the euro-zone crisis as a potential land mine to disrupt a slow move higher.
"The reason we have lifted in the past week is the rhetoric has improved and we are seeing progress, not necessarily a plan, but you are getting countries to admit to the problem, and that is a step in the right direction -- you have to seek help before you can get help," Pado said.
"That is all we really need in order to get beyond this, and start focusing on the future and focusing on our own data. We have plenty of data that suggests slow growth, but nothing that suggests waving the red flag like a crazy person saying, 'How can you not see this?'"
(Reporting by Chuck Mikolajczak; Editing by Jan Paschal)
(Reuters) – Bank of America Corp (BAC.N) will pay $11 million to ousted executives Joe Price and Sallie Krawcheck, a large payout at a time when banks face protests over pay but smaller than the eight-figure packages some executives received before the financial crisis.
Krawcheck -- a former Citigroup Inc (C.N) executive who came to Bank of America in 2009 and was one of the top-ranking women on Wall Street -- will receive a one-time payment of $5.15 million, according to separation agreements filed by the bank on Friday.
Price, a Bank of America veteran, gets $4.15 million. Each will also receive $850,000 over a one-year period.
Price was head of consumer banking and Krawcheck led wealth and investment operations.
The Charlotte, North Carolina, bank last month eliminated their positions as part of a cost-cutting initiative called Project New BAC. Chief Executive Brian Moynihan assigned their duties to two executives promoted to co-chief operating officers.
Bank of America expects to cut 30,000 jobs as part of its efficiency program, which is designed to reduce costs as the mortgage crisis, new regulations, and low loan demand crimp revenue.
While a large amount, the payouts to Price and Krawcheck were in line with severance packages for executives of their stature and pay grade, said a compensation consultant.
Some executives ousted in the financial crisis drew ire for taking home huge severance pay. Protesters on Wall Street are currently demonstrating against outsized compensation for bankers.
In return for the payments, Krawcheck and Price agreed not to compete against the company in their respective areas or lure away clients or employees for a year. They also agreed not to make negative public comments about the bank.
Bank of America agreed to provide prospective employers with "neutral" references and employment verification, according to the filing. The document provided a toll-free number for employers to call.
It's not unusual for companies to say they will provide departing employees with neutral references but "highly unusual" to say it in a public document, the compensation consultant said.
(Reporting by Rick Rothacker in Charlotte; Editing by Gary Hill, Bernard Orr)