UAW/GM Talks: All Worked Out By Next Week?
CNBC Auto and Airline Industry Reporter
While theUnited Auto Workers and General Motors negotiate a new labor contract, it's clear the two sides are on the cusp of a historic agreement. When I talked with one person close to the talks Friday they summed it up best by saying, "I think we'll see something worked out by early next week."
What will they have? Most likely a labor contract where the UAW runs a healthcare trust fund that will handle the claims of current and retired union members. GM will pay billions to set up the fund, and in exchange will no longer have the cost (projected at $51 billion in current and future claims) of covering the healthcare of UAW members. The sticking point right now is determining exactly how much GM will pay (between 60 and 70% of the projection), and how it will pay for that fund, with stock or with cash.
Now, you will hear talk tonight (when the current UAW contract expires) and this weekend about the UAW telling its rank and file workers at specific GM plants to be ready to strike. That's all part of the negotiating process for UAW president Ron Gettlefinger. He needs to show GM and his own members that the option of a strike is still there, even though one person I talked with has said, "I would be surprised if there is a strike."
What about the other issues such as a two tier wager scale or eliminating the jobs bank? They're on the table as well.
From my perspective, GM has a good shot at getting some type of wage scale adjustment that would allow it to lower labor costs either with new hires or with temporary workers. The job bank, where UAW members stayed on the payroll even if they've been laid off, is a stickier issue. But from the people I've talked with, the differences can be resolved.
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