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GM/UAW Talks: Why Agreement May Take A While

Monday, 17 Sep 2007 | 3:41 PM ET
AP

This afternoon negotiators for GM and the UAW resumed talksto iron out a new contract. Despite the growing sense in Detroit that the two sides are close to deal, it may be while before we see an agreement in principal. Why?

It comes down to making sure the numbers work for both sides if they can settle on setting up a trust fund that will handle healthcare claims for current and retired UAW members. In the most general terms, both sides agree on the fund idea.

But given the unpredictability of how much health care claims may grow in the future, the UAW wants to make sure that however much GM pays to set up the fund (odds are between 60 and 70% of future healthcare obligations) is enough to meet the needs of retirees.

My gut says the two sides reach a deal by Wednesday, though with such a dramatic shift in the way the UAW will handle its healthcare bills, I would not be surprised if these talks are dragged out.

Questions? Comments? BehindTheWheel@cnbc.com

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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