GM reaches historic deal with striking U.S. workers

General Motors Corp. reached a tentative deal with striking workers yesterday. The historic new contract which help the automaker narrow the cost gap with its Asian competitors. GM reaches historic deal with striking U.S. workers The deal is also set a framework for contracts with Ford Motor Corp. and Chrysler LLC, which face similar issues on containing health care costs. Production resumed Wednesday following a two-day strike by more than 73,000 United Auto Workers members who walked out of 80 plants after contract talks broke down over issues of job security and health care. While few details of the contract were publicly released, union and company officials said it includes an agreement to transfer the administration of retiree health care to the union in exchange for job security guarantees. While this will require a massive cash infusion, it will take a more than 50 billion-dollar liability off GM's books and allow it to dramatically reduce its labor costs, analysts said. The deal is also said to give GM the right to pay significantly lower wages to some new hires and to offer early retirement bonuses to older workers so as to clear the way for new hires. It also reportedly froze wages and includes a cash bonus in lieu of cost-of-living wage increases. "We really see this as revolutionary," Michael Robinet, an analyst with CSM Worldwide, told AFP. "They were able to really change the way they do business with each other." Union officials praised the contract and said the health care trust will protect retirees and be sufficiently funded to pay benefits for next 80 years. "We feel very good about this agreement," UAW president Ron Gettelfinger said at a press conference shortly after the deal was reached. "I think this strike helped our side." Gettelfinger predicted GM's employment level should remain constant over the four-year term of the contract. Further details are being withheld pending union ratification, the union said. The contract must also be approved by courts and federal regulators. The largest US automaker said the deal "paves the way for GM to significantly improve its manufacturing competitiveness, providing the basis for maintaining and strengthening its core manufacturing base in the United States." "This agreement helps us close the fundamental competitive gaps that exist in our business," GM chairman and chief executive Rick Wagoner said in a statement. "The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments." GM would not disclose how much production was lost by the brief strike, which also forced the closure of three Canadian plants.

GM reaches historic deal with striking U.S. workers

The deal is also set a framework for contracts with Ford Motor Corp. and Chrysler LLC, which face similar issues on containing health care costs.
Production resumed Wednesday following a two-day strike by more than 73,000 United Auto Workers members who walked out of 80 plants after contract talks broke down over issues of job security and health care.

While few details of the contract were publicly released, union and company officials said it includes an agreement to transfer the administration of retiree health care to the union in exchange for job security guarantees.

While this will require a massive cash infusion, it will take a more than 50 billion-dollar liability off GM's books and allow it to dramatically reduce its labor costs, analysts said.

The deal is also said to give GM the right to pay significantly lower wages to some new hires and to offer early retirement bonuses to older workers so as to clear the way for new hires.

It also reportedly froze wages and includes a cash bonus in lieu of cost-of-living wage increases.

"We really see this as revolutionary," Michael Robinet, an analyst with CSM Worldwide, told AFP.

"They were able to really change the way they do business with each other."

Union officials praised the contract and said the health care trust will protect retirees and be sufficiently funded to pay benefits for next 80 years.

"We feel very good about this agreement," UAW president Ron Gettelfinger said at a press conference shortly after the deal was reached. "I think this strike helped our side."

Gettelfinger predicted GM's employment level should remain constant over the four-year term of the contract.

Further details are being withheld pending union ratification, the union said. The contract must also be approved by courts and federal regulators.
The largest US automaker said the deal "paves the way for GM to significantly improve its manufacturing competitiveness, providing the basis for maintaining and strengthening its core manufacturing base in the United States."

"This agreement helps us close the fundamental competitive gaps that exist in our business," GM chairman and chief executive Rick Wagoner said in a statement.

"The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments."

GM would not disclose how much production was lost by the brief strike, which also forced the closure of three Canadian plants.