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GM, UAW reach tentative deal
Details emerge
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Sharon Terlep | Link to Original Article @ The Detroit News


General Motors Corp. and the United Auto Workers reached a tentative agreement early this morning on a historic new labor contract, instantly ending a two-day strike and paving the way for GM to pay the union to take over $50 billion in retiree health care obligations.

In calling off GM's first national walkout in 30 years, UAW President Ron Gettelfinger said he is excited to present the deal to members and hopes to win ratification by the weekend.

Terms of the tentative deal include:
  • The creation of a voluntary employees' beneficiary association, or VEBA, that Gettelfinger said will cover retiree health care benefits for the next 80 years.

    GM agreed to fund the VEBA near 70 cents on the dollar, sources said. That's significantly more then the 65 cent contribution the company originally pushed for.
  • GM will implement a two-tier wage system for workers not doing core manufacturing jobs. The lower tier will be as little as half the current $28-an-hour wage for an hourly worker. The new wage structure would apply to new hires, not current workers.
  • The automaker will make 4,100 temporary workers permanent employees paid at the lower rate. A special attrition program offering workers buyouts or early retirement would help clear out senior workers and make room for the new workers.
  • Also part of a deal is a trade-off in which workers will give up cost-of-living adjustments in exchange for no increases in medical premiums.
  • The agreement would include modifications to the controversial jobs bank program in which laid-off workers receive pay and benefits. The changes will expand the geographic area in which workers would be required to take a new job if one is available. Under current rules, workers are allowed to remain off the job and in the bank unless there's an opening within 50 miles of their old job.
  • Signing bonuses, meanwhile, could help win ratification of a contract. The payments would be $3,000 to start, followed by three years of lump-sum payments equal to 3 percent, 4 percent, and 3 percent of their annual pay in the last three years of the contract.
Both sides touted the accord as one that addresses the competitive gap that exists with GM's foreign-based competitors while protecting U.S. factory jobs. GM will make a massive payment to the union to take over retiree obligations in a move that would erase those costs from the automaker's books while locking in benefits for more than 400,000 retired GM autoworkers.

"It's an agreement we're proud to recommend to our membership," Gettelfinger said at a 4 a.m. news conference at UAW headquarters in downtown Detroit. "This contract will be better in some ways; it will be different in some ways. Our retirees will be exceptionally pleased with the contract."

GM CEO Rick Wagoner said in a statement that the contract will allow GM to become more competitive while investing in its U.S. operations.

"There's no question this was one of the most complex and difficult bargaining sessions in the history of the GM/UAW relationship," he said. "This agreement helps us close the fundamental competitive gaps that exist in our business. The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments."

The union will convene national leaders in Detroit on Thursday or Friday for a vote on the deal. Gettelfinger said the union hopes it will win ratification from the full membership over the weekend. Workers could return to the picket lines if the deal is voted down.

He said the strike broke a logjam with the company over commitments on job security the union was seeking from the automaker.

"I would say the strike probably helped our side more than theirs," he said.

He said did not know if the UAW would bargain next with Ford Motor Co. or Chrysler LLC.

Details of the agreement began coming together on Tuesday night.

Gettelfinger said the UAW "got the job security guarantees we were looking for." The UAW was pushing GM to make specific commitments to invest in U.S. facilities and build future products here.

Closing the gap


With both sides in agreement over shifting retiree health costs to a company-funded, union-run trust, the focus in the last days of negotiations centered on finding a way to slash GM's labor costs without cannibalizing the union's ranks or worker wages.

GM's goal was to wipe out what it says is a $25- to $30-per-hour gap in wages and benefits with foreign-based carmakers operating in the United States, especially rival Toyota Motor Corp. The automaker lost $12 billion over the past two years despite dramatic production cuts and marked improvements in its product lineup.

The UAW is fighting to stem a nearly 30-year trend of declining membership amid drastic downsizing of the U.S. auto industry and growing production overseas. UAW membership has fallen to 576,000 active members from a 1979 high of 1.5 million.

"Two words were used in the announcement -- competitive and investment. That's the framework of this contract," said labor expert Harley Shaiken of the University of California Berkeley. "GM gets an agreement that will make it more competitive and the UAW achieves investment in new plants and product."

The health care trust was in the spotlight through much of the negotiations, though Gettelfinger said on Monday that the strike wasn't over the VEBA.

The company has been pushing hard for a trust that will allow it to offload the retiree burden. Gettelfinger said it was the union that initially wanted a VEBA.

The arrangement still must win court approval and undergo an accounting review by the Securities and Exchange Commission, according to the GM statement.

Bargaining has continued throughout the strike that began Monday after nine days of post-deadline bargaining couldn't bring the two sides together. GM's hourly workers have been manning picket lines across the country since the strike started.

While protests remained peaceful on Tuesday, the strike's impact was beginning to be felt elsewhere, especially among parts makers and GM's Canadian suppliers.





Looks like GM and UAW came to a settlement and according to Gettelfinger, the agreement should stick

http://news.yahoo.com/s/ap/20070926/ap_on_bi_ge/auto_talks
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It seems common sense prevailed since an agreement was reached. Now let's hope the workers' vote goes well too.

Paying 70% of the $51bn unfunded healthcare liablilities would mean paying roughly $36bn, a large amount of money. But hopefully, once this is paid for, GM can once more be a car manufacturer instead of a healthcare and retirement pension provider.

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....on related news, Toyota stock in Japan dropped 13% on news that GM was now ready to kick its ass.

[Well, I just woke up and its my damned dream!]

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Sounds like GM got most of what it needs.

it seems that GM cut another 3 billion dollars from annual (health care) expenses... while cutting starting wages as well...

should make them a considerable more profitable... this sounds like another one time expense that will set profits in the red, but next year they will flurish expecially with new sedan market gaining traction

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:lol: The posting on Yahoo had this comment that just made me laugh:

GM , UAW Settle Strike!

"Now we need to make some quality cars and take back market share from those foreign auto makers," UAW Local 22 President George McGregor said.

:blink: What does he think they have been doing the last few years. :huh:

Course I think for the most part, GM has been building quality auto's since the early 90's with a few lemons out there, not unlike the new big boy Toyota who seems to launch vehicles with cracked from Unibody's after a few months on the road FJ Cruiser, and self destructing cam's in their V8 engines, :rotflmao:

We'll :cheers: here is to a solid competitive race for #1 and the best auto's out there!!! :smilies-38096:

:jump:

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SONOFABITCH I DID NOT THINK IT WOULD END THIS QUICKLY.

Since the parties agreed, i guess this is a good news. the workers got a couple days off, a feel good muscle flex from bringing the strike signs out of the closet, and GM has a plan.

i think also, we could see some positive press out of this unless the typical media wants to analyze this to death and conclude its another toyota advantage. somehow.

f-k the press.

maybe this means the UAW will step up the unionization of the transplants. the positivity of this means now they can turn the poison pen to villifying the transplants as community bloodsuckers.

'hey, we can partner with an American company and MOVE FORWARD, but you (insert slur here) companies don't really seem to give a (insert slang here) about the communities you are in, do you?"

one thing now, hopefully this means we can stop starving GM of R&D money and start putting decent plastic in the cars.

I am quite stunned that this did not drag out.

Edited by regfootball
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So the union will now fund a chunk of the pension?

That's good. It's a bit more like every other job in America now...

I think part of the idea is that it's an investment fund, so it should build some of that remaining 30% on its own. I'm not sure if I'm understanding it quite right, though.

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GM should have pushed harder to eliminate the jobs bank. What a waste of time and money right there alone, I wish I could play checkers while I'm earning a check. So I wonder what type of modified bank it is going to be now?

The jobs bank will expand geographically, so that an opening more than 50 miles away (which is the old limit) must be filled by available employees before they can qualify for the jobs bank...

They curtailed, but did not eliminate the benefit.

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GM should have pushed harder to eliminate the jobs bank. What a waste of time and money right there alone, I wish I could play checkers while I'm earning a check. So I wonder what type of modified bank it is going to be now?

I agree. it's still a waste of money. the new jobs bank agreement is better, but not good enough!

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signing bonuses? what a wonderful little dream world the UAW live in

It is nice. But don't be "hate-in". ^_^

Ok seriously, I haven't seen the paperwork yet, but I'm sure GM made out pretty good. Yeah, all everyone will look at and talk about (complain) is the "signing bonus", and "lump sum payments". But what GM is going to save, $$,$$$,$$$,$$$ - as in billions, will definately help the company.

And for that, I and the UAW are very happy!!

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It is nice. But don't be "hate-in". ^_^

Ok seriously, I haven't seen the paperwork yet, but I'm sure GM made out pretty good. Yeah, all everyone will look at and talk about (complain) is the "signing bonus", and "lump sum payments". But what GM is going to save, $$,$$$,$$$,$$$ - as in billions, will definately help the company.

And for that, I and the UAW are very happy!!

Although no one my family has been a union member, I tend to side with them 99% of the time. However, I do not understand the signing bonus thing. It should seem to further differentiate the "new hires" from the lucky ones who get a higher wage plus a signing bonus. Perhaps the signing bonus should go to the union to set up a job retraining program.

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Although no one my family has been a union member, I tend to side with them 99% of the time. However, I do not understand the signing bonus thing. It should seem to further differentiate the "new hires" from the lucky ones who get a higher wage plus a signing bonus. Perhaps the signing bonus should go to the union to set up a job retraining program.

99% of the time? That's pretty cool, and very different from what I read in here. But I understand, a little, why we (UAW) get such a bad rap. There are a few "bad apples". But there are those kind of people in every workplace.

About the "signing bonus" ... I think it's the wording that is weird. When I hear "signing bonus" I think of pro sports.

In this situtation, I think it could be worded differently.

Your statement about the union setting up a job training program sounds good though.

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About the "signing bonus" ... I think it's the wording that is weird. When I hear "signing bonus" I think of pro sports.

In this situtation, I think it could be worded differently.

Your statement about the union setting up a job training program sounds good though.

It's not just pro sports though. My daughter got a $5000 signing bonus as a nurse. By the way her hospital went union and when she tried to join the union management they said she couldn't. They declared her management because they pay her an extra $1.20 per hour as charge nurse. What a hoot/gimmick.

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It 's good to see the strike over so soon. I think it's a very reasonable compromise. That's what collective bargaining is all about. Despite all the union bashing on these blogs, it shows that the UAW are willing to work with the car companies as long as they're treated fairly.

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It 's good to see the strike over so soon. I think it's a very reasonable compromise. That's what collective bargaining is all about. Despite all the union bashing on these blogs, it shows that the UAW are willing to work with the car companies as long as they're treated fairly.

Agreed!
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GM won all the Way! :D The two day shutdown was just allowing the UAW to posture for it's members. Funny thing is that those two days really helped GM by reducing inventories that would have sat. So Over all, yes a big up front cost, but long term GM will prosper! :D

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