The UAW and GM are still chin-deep in negotiations, but perhaps the key item that effects the future viability of the General has been agreed upon. The new labor contract will include a UAW-run trust fund that will get costly health insurance premiums off GM's books. The fund, called a Voluntary Employee Beneficiary Association, or VEBA, has been a huge part of GM's plans to level the labor cost playing field vs. transplant automakers. GM and the UAW apparently still haven't agreed to the amount of cash the automaker will put in the fund, but most experts say the number is somewhere near $30 billion, or 60-70-percent of the General's total health care liabilities. Ford and Chrysler are likely just as happy as the General, as the contract GM signs will likely be close to what the other two domestic automakers will receive.

This general agreement on health car means that these contract negotiations are as transformational as the automaker said they would be, but more work remains. With the lion's share of the negotiations centered around the VEBA, wages, pensions, and investment in US plants are still on the table. We may not see a conclusion of these talks for quite some time.

[Source: Freep]


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