GM negotiations pick up steam after deadline

[KILLER74Z28]

GM negotiations pick up steam after deadline
Some issues are settled, but others, like health care, remain

September 16, 2007

BY SARAH A. WEBSTER AND KATIE MERX

FREE PRESS BUSINESS WRITERS

After resuming contract talks mid-morning Saturday, General Motors Corp. and the UAW continued to make progress -- so much, in fact, that several subcommittees have already settled some of their issues, people familiar with the talks said Saturday.

“Some of them are finished up,” Chris (Tiny) Sherwood, president of UAW Local 652 at GM’s Lansing Grand River plant, which makes Cadillac cars and SUVs, told the Free Press late Saturday afternoon.

While a substantial amount of work remains, Sherwood, like others, did not expect an agreement by Saturday night.

But the news out of downtown Detroit, where the talks have been ongoing for eight weeks, was encouraging enough that Sherwood, a 40-year UAW member, decided to temporarily close up his local’s standby strike operation.

His local had hundreds of picket signs printed that read “UAW on Strike,” and several members had been staying at the office late into the night, ready to trigger a telephone chain to members to quickly launch a strike.

“We’re going to shut down here right now,” said Sherwood, who has lived through three strikes.

Progress, and a slow pace

With negotiations now past the 11:59 p.m. Friday expiration date of the current labor contract, all of the top officers from both parties -- including GM Chairman and Chief Executive Officer Rick Wagoner and UAW President Ron Gettelfinger -- are actively involved in negotiations occurring at the Center for Human Resources in downtown Detroit, a person familiar with the talks said.

GM and the UAW negotiators worked nearly 20 hours Friday, right through the contract’s expiration.

They wrapped up about 4:30 a.m. Saturday and resumed mid-morning at the UAW-GM training center in Detroit, GM spokesman Dan Flores said.

Until Thursday, the UAW had been negotiating simultaneously with GM, Ford Motor Co. and Chrysler LLC.

On that day, however, Ford and Chrysler agreed to an indefinite contract extension with the union, and the UAW named GM a “strike target” in a message from UAW Vice President Cal Rapson to union local leaders.

That happened after a disagreement between Gettelfinger and GM North America President Troy Clarke about how to establish a retiree health care trust.

Local union leaders were then told to prepare for the possibility of a strike, even though industry experts said such an act could destroy the union and the company.

The UAW leadership had scheduled a 10 p.m. Friday conference call notify union local leaders on whether the two sides had reached a tentative agreement, extended the contract or broken off talks. GM’s 73,000 U.S. autoworkers nationwide were on standby to learn whether to strike or to keep working under an extension of the 4-year contract forged in 2003.

That call was rescheduled to 11 p.m., but no call was made until after midnight, the union local leaders said.

Later Saturday, people close to the negotiations said progress was being made.

Meanwhile, talks are continuing at a slower pace at Ford and Chrysler, despite the extensions.

Ford spokeswoman Marcey Evans also said talks between the automaker and the UAW were “ongoing,” but she would not say whether there were any meetings this weekend.

Health care a major issue

Analysts said the UAW’s decision to dub GM a strike target was deliberate and likely reflected heightened tensions between negotiators as they approached the contract’s expiration. In year’s past, for example, the union insisted on more neutral language, such as “lead company.”

The choice of GM as the lead company was seen by many analysts as an indication that the UAW was willing to take on the risks and challenges associated with a retiree health trust called a VEBA, or Voluntary Employee Beneficiary Association.

While other such retiree health trusts exist, none is as big as what is being discussed. GM reports about $64 billion in health care obligations, more than $50 billion of which is believed to be future retiree health costs. It’s thought that GM would like to rid itself of the entire obligation if the union will agree.

GM executives have long indicated an interest in creating a health care trust, and within the last two weeks, people close to the talks said, Gettelfinger has expressed a willingness to negotiate one.

Two of the main sticking points to creating a VEBA are how much money GM would contribute to the creation of a trust and the source of the assets, labor experts said. People familiar with the talks say GM proposed paying no more than 65% of its estimated liability into a fund. Analysts said union leaders want more than 70%.

They said the automaker would use a combination of cash, stock, real estate and proceeds from new borrowing.

“My sense is that an agreement on the VEBA is there, but that becomes meaningless unless they can agree on the terms,” said Harley Shaiken, a labor expert from University of California at Berkeley, who has been in contact with union members.

“It’s like agreeing to purchase a house -- all you have to do is agree on the price. Well, that’s a big deal.”

Another tough negotiating point has been whether the parties would be willing to share the burden or benefit of future changes in health costs. The UAW wants GM to agree to add money to the trust if costs grow faster than expected. GM wants a refund if costs aren’t as great as expected or a national health care program diminishes the retiree health care burden, analysts and others said.

Rhetoric and reality

All three automakers are in the midst of massive restructuring programs -- they lost a combined $15 billion last year -- and analysts said that none of the automakers or the UAW can withstand a strike, though the UAW does have a $1-billion strike fund.

It is exactly because no one expects the union to walk out, analysts said, that the UAW needs to show it is willing to do so.

“Sometimes, it’s kind of huffing and puffing and you have to separate out the rhetoric from the reality,” said Richard Block, professor of labor and investor relations at Michigan State University.

“One would not think it would be in the union’s best interest to strike, or at least to have a prolonged strike.... I could see walking out for a day or a few days, but I don’t see a strike that extends much beyond that.”

Contact SARAH A. WEBSTER at 313-222-5394 or swebster@freepress.com. Business writer Tim Higgins contributed to this report.

[Mr. Wyndham]

Good News imo. It isn't going to be easy - but if this is done right, both sides should be helped...

[KILLER74Z28]

UAW sets new strike deadline against GM for 11 a.m. Monday
September 23, 2007

By DEE-ANN DURBIN

AP Auto Writer

DETROIT (AP) — The United Auto Workers set a deadline of Monday morning to strike General Motors Corp. if a new contract isn’t reached even as the two sides continued bargaining late Sunday night, according to a local union Web site.

The deadline to reach an agreement was set for 11 a.m. EDT Monday, according to a posting on the Web site of UAW Local 160 in Warren.

GM said in a statement Sunday night that it is working with the union to resolve issues.

“The contract talks involve complex, difficult issues that effect the job security of our U.S. workforce and the long term viability of the company,” said the statement, which was posted on a GM Web site. “We are fully committed to working with the UAW to develop solutions together to address the competitive challenges facing General Motors. We will continue focusing our efforts on reaching an agreement as soon as possible.”

[Mr. Wyndham]

The chance that they strike for long is very small. niether party is unreasonable in this. GM can't afford to pay retirement pensions anymore, and the UAW doesn't want jobs goign over seas...

They are getting closer to an agreement, though. everything has been settled except for this VEBA thing. and if the UAW doesn't watch it, GM will take all production out-of-country...which sucks.