Published: Sunday, September 16, 2007
UAW, GM making progress in talks Retirees' health care remains high on list
DETROIT — Despite the differences that remain, negotiators for the United Auto Workers and General Motors Corp. appeared to be making progress late Saturday.
Progress would at least temporarily avoid a strike by GM's 73,000 U.S. autoworkers.
Negotiations ended around 9 p.m., GM spokeswoman Katie McBride said. They are scheduled to resume midmorning today.
At the Lordstown assembly plant, emotions are high, said Ben Strickland, UAW Local 1112 shop chairman.
Lordstown union leaders separately have been negotiating local issues at the plant with management and hoping that union bargainers in Detroit can win the plant a commitment from GM regarding a new car model.
The GM Lordstown products are the Chevrolet Cobalt and Pontiac G5 small cars, but those are expected go out of production after the 2009 model year.
It's very much on Lordstown workers' minds that they want to end up with a future product, said Strickland.
He said Cal Rapson, vice president of the international union, promised to do his best to secure a new product for Lordstown.
Backing their union
Strickland also said workers did and continue to stand by the larger union.
"We were willing to walk out in support of the International union. They have our best interests."
In Detroit, various union subcommittees — which deal with issues such as pensions, benefits and job security — have wrapped up negotiations, according to a person briefed on the negotiations. The person, who spoke on condition of anonymity because the talks are private, also confirmed that GM Chairman and CEO Rick Wagoner is actively involved in the talks.
A deal wasn't expected to be reached Saturday.
On Friday night, factories across the country were mobilized for a possible strike starting at midnight, when the UAW's contract with GM expired. But local union leaders said a call from UAW leadership telling them to walk off their jobs never came.
Instead, negotiators agreed to bargain hour by hour as the workers stood by and a midnight contract expiration deadline passed. By early Saturday, local leaders said they were told to go home and wait for updates from Detroit.
The talks restarted about 11 a.m. Saturday after breaking off for the night at 4:30 a.m., GM spokesman Dan Flores said.
Strickland said Saturday evening that the hour-by-hour strategy is well-planned to force management to keep meeting.
"Say they agreed to a two-week extension — that shows a weakness," he explained. Instead, the hour-by-hour deadlines put more pressure on management, he said.
Nonetheless, it is a painful strategy, he acknowledged.
"No one knows what's happening hour to hour."
Strickland said that with key issues on the table, it's hard to predict whether there will be a settlement or a strike.
Facts and figures
The UAW represents about 2,400 workers at the Lordstown assembly plant, about 1,200 at an adjacent fabricating plant and about 500 in various nearby feeder plants.
GM Lordstown opened in the 1960s and had a history of strikes in its early years. It went through similar worries about having a car to build about four years ago, until GM announced it was replacing production of Chevy Cavalier and Pontiac Sunfire models there with the Cobalt.
This year's contract talks are considered crucial to the survival of GM and its U.S.-based counterparts, Ford Motor Co. and Chrysler LLC.
All three companies want to cut or eliminate what they say is about a $25-per-hour labor cost gap with their Japanese competitors.
The gap, the companies say, is one reason why the Detroit Three collectively lost about $15 billion last year, forcing them to restructure by shedding workers and closing factories.
The central issue in this year's talks has been skyrocketing health care costs. Automakers have been pushing the union to take over responsibility for retirees' health care, an unfunded expense estimated at more than $90 billion for GM, Ford and Chrysler.
Retiree health care
Automakers want to pay billions into a union-run trust that would pay retiree health care bills, and both sides have been wrangling over how much the automakers would contribute to the trust, according to people who have been briefed on the talks.
A local UAW leader said the union also was seeking guarantees for future work at U.S. plants in exchange for taking over health care.
If the union takes on the health care costs, the companies could remove a huge liability from their books — potentially improving their credit ratings and stock prices.
Industry analysts have said they expect GM to offer the union 65 percent to 70 percent of the retiree health care obligation.
The UAW chose GM as its lead company and possible strike target Thursday. Typically, the union negotiates a contract with the lead company and then presses the other two to accept the same terms. Ford and Chrysler have extended their contracts indefinitely, although talks were continuing and either side could break off the contract extension with three days' notice.
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