By TOM KRISHER, Associated Press Last updated: 1:12 a.m., Friday, September 21, 2007
DETROIT -- General Motors Corp. and the United Auto Workers continued to discuss the automaker's proposal to pay the union to take on retiree health expenses, even though GM's latest offer on the issue was rejected by the UAW president, a person who has been briefed on the talks said.
The person, and a union local leader who also was briefed on the talks, said negotiators have wrapped up work on all noneconomic issues and are trying to figure out the health care piece because the rest of the contract, including job security promises, pay and health insurance contributions, is contingent upon it.
Both people requested anonymity because the talks are private. Each said the UAW is still crunching numbers on GM's proposal to offload most of its $51 billion in unfunded retiree health care costs on the union.
GM spokesman Tom Wickham and UAW spokesman Roger Kerson declined to comment on the talks Thursday.
Thursday was the sixth day of bargaining since GM's contract with the UAW was scheduled to expire, but the union has extended the pact hour by hour. Negotiators went home for the night early Friday and were scheduled to meet again later in the morning, Wickham said.
With both sides far apart on economic issues, the talks likely will take several more days to complete, one of the people briefed on the talks said.
Discussions continued even though UAW President Ron Gettelfinger on Tuesday rejected a GM offer to pay into a retiree health care trust called a Voluntary Employees Beneficiary Association, or VEBA, one of the people said.
GM, which has been picked by the union as the lead company and potential strike target in this year's bargaining, badly wants the UAW to agree to the trust. Whatever agreement is reached with GM likely would be used as a pattern for the other two Detroit automakers, Ford Motor Co. and Chrysler LLC.
While the VEBA is studied, negotiations have slowed on other economic issues, both people said. Noneconomic issues include grievance procedures, absenteeism and other items.
The UAW is seeking to trade taking on the trust for pledges from GM that it will build new vehicles in U.S. factories, the people said.
Deutsche Bank analyst Rod Lache said in a note to investors Thursday that the union has agreed to the concept of a VEBA but so far doesn't like the company's terms.
"The UAW knows that GM cannot sign a contract that excludes a VEBA deal at this point, and that they cannot accept the consequences of an uncompetitive cost structure either," Lache wrote. "Without a VEBA deal, GM has threatened to begin a much more aggressive downsizing of its U.S. manufacturing base."
Lache wrote that GM knows it is risking a strike.
"It is our belief that the most likely outcome is that GM and the UAW will reach a compromise and pursue a VEBA solution after a few days of drama," he wrote.
Since the company and union are billions of dollars apart on how much GM would pay into the trust, Gettelfinger wanted to talk about other issues, one of the people said.
Now under discussion is a second offer from GM that doesn't include the trust but has larger cost cuts, including up to a $5 drop in hourly wages, increased health care contributions, fewer guarantees of new work at U.S. factories, reduced vacation time and other items. GM, as well as Ford and Chrysler, are trying to cut what they say is about a $25 per hour labor cost gap with their Japanese competitors. Industry analysts say the costs must be reduced for the U.S. companies to survive.
Analysts have said GM wants to pay the union about 65 percent of its retiree health care obligation to form the trust. The union has hired an outside consultant to study GM's proposal, the people briefed on the talks said.
If this deal on retiree health care is approved it will be just one of many companies who will try to do the same thing when their contracts are up for negotiations. The companies have been trying for years to eliminate retiree health care due to excessive cost of the program. In some cases the guarantee of life long health care was the only reason that many employees accepted early retirement.
I absolutely agree with you senders. The unon heads make a ton of money. They are actually no different than CEO's of major corporations. The average worker has yet to realize that they are employeed not only by their employer, but also by their union. So the employer pays them in one hand and the union takes it out of the other. It's nuts! When will these people wake up and smell the coffee and speak for themselves?
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
The problem really is that unions have become just like the big companies that they bargain with, corruption and greed have become a major problem with the unions as they've grown larger thru mergers.
You are correct shadow. The unions have become just as greeding as the major corporations. The only difference, is that the corporations actually employ people. Ya know, they actually give people jobs. And the corporations PAY THEM. AND the corporations pay into our economic system through taxes. The unions just TAKE from the corporation and from the union employee.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
By TOM KRISHER and DEE-ANN DURBIN, Associated Press Monday, September 24, 2007
DETROIT -- In the end, the first nationwide strike against General Motors Corp. in 37 years came because the United Auto Workers want something that GM will find difficult to promise: Job security.
UAW officials said the 73,000 UAW members who work at about 80 U.S. facilities for the nation's largest automaker didn't strike Monday over what many thought would trip up the talks: A plan to shift the retiree health care burden from the company to the union. They said they also didn't strike over wages.
They said union members walked out because they want GM to promise that future cars and trucks such as the replacement for the Chevrolet Cobalt small car or the still-on-the-drawing board Chevrolet Volt plug-in electric car will be built at U.S. plants, preserving union jobs.
The strike puts GM, which is restructuring so it can better compete with Asian automakers, in a bind as some of its new products begin to catch on with consumers. But it also means workers are taking a big risk -- giving up pay and slowing down GM in an uncertain economy.
"Job security is one of our primary concerns," UAW President Ron Gettelfinger told reporters Monday afternoon after talks broke off and the strike began. "We're talking about investment and we're talking about job creation" and preserving benefits, he said.
Talks resumed a short time later as sign-carrying picketers marched outside plant gates.
Worker Anita Ahrens burst into tears as hundreds of employees streamed out of a GM plant in Janesville, Wis., just after the strike began at 11 a.m. EDT.
"Oh my God, here they come," said Ahrens, 39. "This is unreal."
Ahrens has seven years at the plant, where she works nights installing speakers in sport utility vehicles. She waited Monday for her husband, Ron Ahrens, who has worked there for 21 years.
The couple has three children, including a college freshman, and Ahrens worried about how they would pay their bills.
"This is horrible, but we're die-hard union, so we have to," Ahrens said. "We got a mortgage, two car payments and tons of freaking bills."
The striking workers will receive $200 a week plus medical benefits from the UAW's strike fund. The union had more than $800 million in that fund as of last November, according to the UAW's Web site.
The UAW, Gettelfinger said, is willing to talk about taking money from the company to form a trust that would be responsible for billions of dollars in retiree health care costs.
GM wants the trust, called a Voluntary Employees Beneficiary Association, or VEBA, so it can move much of its $51 billion in unfunded retiree health care liabilities off the books, potentially raising the stock price and credit ratings. It's all part of the company's quest to cut or eliminate about a $25-per-hour labor cost disparity with its Japanese competitors.
"This strike is not about the VEBA in any way, shape or form," Gettelfinger said. "We were more than eager to discuss it," although he said no agreement had been reached.
Industry analysts said initially the strike would have little impact on consumers because GM has sufficient inventory stockpiled for most of its products. But Monday afternoon, the Teamsters transportation union said its 10,000 automotive transport members would not cross UAW picket lines to deliver GM cars and trucks. GM reported that it had just under 950,000 vehicles in its inventory at the end of August, about 35,000 below the same time last year.
Tom Libby, senior director of industry analysis for J.D. Power and Associates, said even a short strike could hurt the company because its new crossover vehicles, the Buick Enclave, GMC Acadia and Saturn Outlook, are selling well and in short supply.
"The momentum they've established for those products would be interrupted if there's a supply interruption," Libby said. "There's not a lot of inventory available to sell down. So they need to keep that pipeline full."
Libby called the Enclave and Acadia a success story for GM because they don't stay on lots for long and they sell at or near full price.
"GM, financially, they don't have a lot of cushion," he said. "I just think it's going to hurt both sides in the long run."
GM had about a 65-day supply of cars and trucks as September began, versus a 71-day supply at the same time last year, said Paul Taylor, chief economist for the National Automobile Dealers Association. The Enclave, he said, is at a tight 24-day supply.
The strike will cost GM about 12,200 vehicles per day or 760 per hour, according to the auto forecasting firm CSM Worldwide of Northville.
If the walkout goes beyond 36 hours, CSM expects vehicle production in Canada to be affected because of a lack of U.S.-built engines and transmissions.
The walkout could further damage the image of the UAW, David Cole, chairman of the Center for Automotive Research in Ann Arbor, said shortly before the strike began.
"What it says is the union is the same old militant organization," Cole said. "What is a real concern is buyers that punish a union by not buying the products they build."
Cole said the UAW leadership may need a strike to show members that it did all it could to get the best deal.
"They're in a bit of a box, in that they need some drama to get an affirmative vote on this," he said.
GM likely has threatened to pull investments out of the U.S. if the union does not agree to its terms, he said.
Gettelfinger, in his post-walkout news conference, said the union has done a lot to help the struggling GM, including health care givebacks in 2005. But during the weekend, he said GM's stance hardened.
"It was going to be General Motors' way at the expense of the workers," Gettelfinger said. "The company walked right up to the deadline like they really didn't care."
Gettelfinger said the union didn't want to strike.
"Who wins in a strike? But again, you can be pushed off a cliff, and that's what we feel like happened here," he said.
GM spokesman Dan Flores said the automaker was disappointed in the union's decision.
"The bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company," he said. "We remain fully committed to working with the UAW to develop solutions together to address the competitive challenges facing GM." GM shares fell 20 cents to $34.74 in trading Monday.
The last national strike against GM was in 1970 and lasted 69 days.
An agreement between GM and the UAW would become the pattern for pacts with Ford Motor Co. and Chrysler LLC.
The negotiations come at a difficult time for both the automakers and the union. Detroit's automakers lost a collective $15 billion last year.
The union also is feeling pressure. UAW membership has fallen from a high of 1.5 million active members in 1979 to around 576,000 today.
The union had more than $800 million in that fund as of last November, according to the UAW's Web site.
WOW! They probably have more money than GM!
This is a real tough call for both sides. Although we all want jobs secure in this country, that is almost impossible in our global economic system. Whether we like it our not, we just can't compete with the other countries. Not with the wages we are accustomed to. So the workers are wanting job security, which is understandable. And the company just wants to stay afloat and succeed. Tough call!
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
In this day and age there's no such thing as job security, the company can do what ever they want to and they'll never agree to complete job security if it'll mean the company goes bankrupt.
An X-boss told me once that YOU are your job security and that you must always keep yourself employable at all times even if it means taking classes to increase your knowlege in todays workplace. And he is/was correct.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
And remember when we had the Work-without-a-Mexican Day, 5/5. The world did not stop and it was proven. If these people fail, all it's going to do is to push more and more jobs overseas and then these will be more people on the public dole. The Democratic party is doing just that tonight...partying. They can't wait for all these people to go on Medicaid, Public Assistance, etc. For Hillary, them going on Medicaid would be the next step in her national healthcare and putting me out of a job.