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UAW: Now's the time to work with GM

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UAW: Now's the time to work with GM

Beleaguered union appears ready to help ailing automaker before contract expires in 2007.

By Brett Clanton / The Detroit News

CHICAGO -- Given General Motors Corp.'s financial woes, the United Auto Workers may have to work with GM to lower health care and other costs before the two sides renegotiate a major labor contract in 2007, a top UAW official told local union leaders Monday.

In frank discussions at an annual meeting here, UAW Vice President Richard Shoemaker said the union wants to help GM become more competitive but will only consider moves that do not require it to reopen its contract with the automaker, according to UAW officials who attended the meetings.

Shoemaker didn't outline possible solutions that the union and GM have discussed in closed-door meetings in Detroit this summer, or any timetable for reaching a deal.

But his comments suggested to some that a strike is not a realistic option and the union may be better off reaching an agreement sooner rather than later.

"He said (GM is) not going to be in any better shape in 2007 than they are today," said James D. Kaster, president of UAW Local 1714, which represents workers at a GM small car plant in Lordstown, Ohio.

The meeting, which includes top UAW officials and union leaders from GM and Delphi Corp. plants, is taking on special significance this year because of mounting financial troubles at GM and Delphi.

Both companies are losing money in North America and are seeking financial relief from the UAW to stem losses.

GM, which has lost $2.5 billion in North America and burned through $3 billion in cash this year, wants immediate relief from soaring health care costs that equal $1,500 per vehicle.

It is seeking to cut UAW health care costs by as much as $1 billion a year. Delphi, which has reported four consecutive unprofitable quarters, said it would consider filing for bankruptcy if it does not reach a deal with GM and the UAW that lowers U.S. factory wages and health care expenses.

"We can no longer afford to continue to pay all-in wage and benefit costs of approximately $130,000 per year per U.S. hourly worker," Steve Miller, Delphi's chairman and CEO, said during a second-quarter earnings conference call Aug. 8.

The UAW has launched an independent review of GM's financial position and hired a team of outside financial experts led by Lazard Ltd. to study the automaker.

But what shape a deal will take with GM or Delphi -- if one is made -- is still unknown.

Union officials came to Chicago this week hoping to hear an update that they could carry back to members, but the lack of specifics in Shoemaker's presentation left some with more questions than answers.

Shoemaker's "down-from-the-podium" presentation Monday was described as an earnest "fireside chat" focusing on GM's deteriorating financial condition. He plans to meet with Delphi union officials today.

He declined to comment for this report.

Gordon Drennan, a shop committeeman at UAW Local 659, which represents workers at a GM plant in Flint, said he left Shoemaker's talk with little encouragement that GM's outlook was going to improve soon and that the pressure would be lifted from the union to make concessions.

"It's a big problem," he said, shaking his head outside a hotel conference room after the mid-morning meeting. "And I don't see it going away."

In June, GM announced plans to close plants and eliminate 25,000 jobs in North America by 2008. The moves will generate $2.5 billion in annual savings.

GM executives have pressed hourly workers to accept higher out-of-pocket costs for health care that are more in line with those paid by its salaried workers.

But GM will not be able to make radical adjustments to health care costs and still remain within the bounds of the UAW contract. What is more likely, say union officials, is that the UAW will consider modest increases in medical co-payments and deductibles, moves that could save millions, but not the billions of dollars the automaker says it needs.

"It would be in the m's, not the b's," UAW Local 1714's Kaster said.

The UAW is likely to fare better by reaching a deal now rather than later, given the difficult road GM faces in turning its North American operations in coming years, said Walter McManus, director of the Office for the Study of Automotive Transportation at the University of Michigan.

"They need to make a deal. Their situation is not improving," he said.

But some union leaders say that U.S. automakers have been cutting jobs for years and that it is unfair for rank-and-file workers to be hit with extra costs when the company's management is making poor decisions.

"They keep wanting more," said Drennan, who has seen the number of workers at his plant cut in half over time. "I know we got to make changes, but when is it enough?"

Still, others seem to be more willing to give if it means helping GM out of its current crisis.

Roy Nievierowski, president of UAW Local 362, which represents workers at a GM engine parts plant in Bay City, said his members are nervous about the situation. But he believes the union leaders will make the right decision.

"They say the way GM goes, the country goes," he said. "I still believe that's true."

You can reach Brett Clanton at 313-222-2612 or


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The UAW needs to wake up. The old days are gone and the golden goose died. It's time GM told them to go screw and hires non-union labor. This is do or die time.

The absolute nerve they have ordering a "financial review." What is there to review? As I've said before, the UAW better get themselves into the other manufacturer's North America plants or get the hell out of GM. You can't have it both ways.

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