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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Reader Comments (Page 1 of 1)
Barney @ Sep 22nd 2007 6:04PM
One can assume that the difference in costs won't be huge. The UAW would never agree to anything that costs them money. Other commitments by GM must have been in the pot as well.
Whitie @ Sep 22nd 2007 6:20PM
Agreed, GM will be forking over money in buckets, with the promise of more money if needed. The agreement details will sicken the average American not fortunate enough to work for a pushover company. God how I've come to despise the UAW and their stranglehold over a weak US auto industry.
wally @ Sep 22nd 2007 7:01PM
The will probably use GM stock for major amount!
far jr @ Sep 22nd 2007 9:33PM
With this topic at the forefront of the negotiations, it shows the importance in keeping domestics viable. I think the UAW also realizes the necesity of controlling health care to keep plants and investment in the USA.
Datsun 510 @ Sep 23rd 2007 4:04AM
far jr has it right. These negotiations show that what might once have been considered a UAW stranglehold has become a firm handshake in good faith with the auto industry to behave in their joint best interests.
John Bryans Fontaine @ Sep 23rd 2007 2:20PM
I think it's a major irony that the Corvette that Whitie so covets was built by the unionized labor that he so despises.
Then again, Unions build the the best cars on the planet, including Ferrari, Mercedes, Porsche, BMW, and Aston Martin, not to forget the Mustang.
dave @ Sep 23rd 2007 5:17PM
I think that the UAW just needs to step back and take a good hard look at who helps keep them in business by paying their union dues, and maybe just pull their head out and learn how to get along with the rest of us, the union is not what it used to be.
David C. Atkin