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Big Three Narrow Gap with Competition

September 22, 2003

With creative, new four-year contracts with the United Auto Workers union in hand, Detroit's Big Three automakers took a big step this week

toward closing the competitive gap with foreign automakers, according to the Detroit News.

After a decade of fat labor deals coupled with alarming losses in market share, Detroit's automakers needed a watershed deal with the UAW to level the playing field with their Asian and European rivals., the News said. And while the contract didn't come cheap, General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group got what they paid for, according to the News.

Industry analysts called the contract a pivotal event in the domestic automakers' drive to cut costs and convince the UAW of the threat that Japanese and European rivals posed to their jobs and pensions. "It's very positive that after a decade, the union is coming to the party to address the competitive issues with Toyota, Honda and Nissan," said Joseph Phillippi

of the consulting firm Auto Trends in Short Hills, N.J.

The U.S. market share of Detroit's domestic brands has dropped to 60 percent this year, despite a flood of incentives and rebates averaging $4,000 a vehicle, according to the News.

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