GM-UAW reach deal to end strike

[krispos42]

Source: CNN.com

GM-UAW reach deal to end strike

Marathon bargaining session reaches agreement to end two-day old strike at No. 1 U.S. automaker; union to assume more than $50 billion in retiree health care costs.

By Chris Isidore, CNNMoney.com senior writer
September 26 2007: 4:57 AM EDT


NEW YORK (CNNMoney.com) -- Negotiators from the United Auto Workers union and General Motors reached a tentative agreement on a deal early Wednesday to end a two day old strike by 73,000 workers, according to the union and the company.

Terms of the agreement were not immediately available, but the statement from the company said the deal does include the establishment of a union-controlled trust fund that will assume responsibility for future retiree health care costs from GM (Charts, Fortune 500), the nation's No. 1 automaker. Getting agreement for that shift of costs, estimated at more than $50 billion, was the key bargaining goal of the talks for GM.

<snip>

But Gettelfinger said Monday the union needed job guarantees for its members before it could agree to the cost-savings sought by the company to return its operations to profitability. The details of such guarantees, whether in the form of promises to invest in U.S. plants and build new vehicles at domestic plants, or the type of income guarantees that were were present in past contracts, were not immediately known.

The shedding of retiree health care costs by GM will be a major step towards to the company's effort to close the competitiveness gap with nonunion automakers such as Toyota Motor (Charts) and Honda Motor (Charts). But it will not come cheap for GM. The automaker will have to come up with tens of billions of dollars of cash, stock and debt to cover those future costs.

<more>

Read more: http://money.cnn.com/2007/09/26/news/companies/uaw_gm_deal/index.htm?postversion=2007092604