"These are going to be tough negotiations and the automakers are not waiting,Ó said Dr. Harley Shaiken, auto industry labor analyst for the University of California, Berkley. "They are talking every day. The issues this year are competition, conflict and China.Ó '

Shaiken, who presented his analysis before journalists on the eve of the North American International Auto Show here, stopped short of saying the negotiations would go forward without problems, indicating there are some deep differences between the car manufacturers.

"These are going to be some trend-setting negotiations,Ó Shaiken said. "Toyota, Nissan and Honda are tracking the UAW and the contracts are going to be far from identical.Ó

Shaiken said UAW officials fully understand the severity of the auto industry and added it was a little misleading to discuss the unions per se. "They are a very complex organization,Ó he said. "And the top leadership is in the business of knowing where they want to go and they have pragmatism.Ó

The second part of the organization is the organizational leadership, consisting of the presidents of the locals, the shop chairman and the different groups which are closer to the rank and file members.

"Early in 1982 when the organization signed the contract with the top leaders with General Motors, the second tier group turned it down,Ó Shaiken said. "I think this will be unlikely this time.Ó

"This is going to be a far broader agreement,Ó Shaiken predicted. "The rank and file know what they want and they are a little apprehensive. They are seeing more competition and are reluctant to give up what they have and there will be more volatility there.Ó

Shaiken said there will be an increased focus on the national talks, with that focus to start in earnest this summer. He said Ford Motor Company signed 30 contract changes within the past year, most of which resulted in a radical restructuring of work rules and changes.

"Many of them (85 percent) were approved, but there were some that were not approved,Ó Shaiken said.

"Negotiations are difficult to predict and they are basically a series of trade-offs,Ó Shaiken said. "If you take one issue out of context it is not good for the negotiations. Everyone discusses the issues at the same table and there is some give and take throughout.Ó

According to Shaiken, none of the Detroit automakers want a strike this year, following the results of what was predicted to be a disastrous 2006 season. Even increased incentives could not bring the public to the showrooms to buy cars and trucks, in part due to the volatile economy and the rapidly increasing gas prices.

"There is again a possibility that there will be a strike, but I am not one to rule anything out,Ó Shaiken said. "It could be a short strike.Ó

In order to move forward, Shaiken told the reporters that they needed to have a better sense of where the industry has been in the past. He pointed to four issues in the upcoming negotiations, which included manufacturing, public policy, labor finances and the cascading problem. "There has been a serious faults in terms of production and direction within the Detroit automakers and management has made some of those decisions,Ó Shaiken alleged.

"Ford Motor Company had a five year period where they earned $38 billion, which was the most profit for them and they did so with labor costs the same as today.Ó

Shaiken said in 2006, the average car cost General Motors $2,700 to produce while the same vehicle cost Toyota $600.

"That is a $2,000 difference. If GM could have sold the vehicles at the cost that Toyota is selling them, they could have made $2,000 per vehicle and over $8 billion dollars. This is not going to happen,Ó he said. On the public policy front, the real failure in the United States is the health care premium costs. He cited a case where it cost GM $1,500 to pay their employees health care premiums per car while the average for the automakers in Detroit is $1,400, compared to the average for Japanese in the same US plants is $400.

He also said the US has an older workforce and a large number of retirees which they have to also pay costs for, adding these are the losses the automakers have to face and it places an additional burden on them.

On the cascading issue, Shaiken said if the firms started running their plants at less than full capacity, that would not be something they would want to continue.

"If you run a plant at half capacity for a year it will cost you 77 percent of what it would cost at full capacity,Ó Shaiken said.

The other thing automakers are flirting with is the junk bond ratings. "It affects negotiations,Ó he said. "That is one the gems of the automakers if their credit units and Ford Motor Credit would let people borrow at six percent and they would pay a low percentage. It just adds to the costs.Ó What does Shaiken expect the UAW and the automakers to discuss: 1. Cost of Living allowances, which were started in 1948, which were not given up easily and created stability in the industry.

2. The three percent bonus, which were included in a pattern contract one year and also wonÕt go away.

3. Pattern bargaining agreements. The UAW sets the term for one agreement and the other two automakers go along with it. The other two automakers generally pick some of the more innovative things for their contracts, Shaiken said.

Washington politicians will do almost nothing to help the industry out in the coming year, according to Shaiken.

"They will do almost nothing between now and the 2007 negotiations. In reality, the Big Three are in some tough shape,Ó he said.

He said federal officials could deal with the health care costs quickly, but said that was not coming forth soon. "I do see it at the state level with Massachusetts and California looking at it,Ó he said.

Trade agreements also need to be dealt with, but the automakers need to apply some political pressure to get the trade agreements off dead center.

He also said the UAW is also unable to organize any of the transplants, where all it would take to organize a union is have 51 people sign a card, which is more or less the Canadian model.

"I donÕt think this is going to happen in the next year,Ó Shaiken said. And ShaikenÕs strike target.

"It could be any one of the three if it would not be some joint target,Ó he said.