GM, UAW reach tentative deal Details emerge 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
