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GM, UAW Talks Enter Fifth Day Past Expiration

AP
Wednesday, 19 Sep 2007 | 3:14 PM ET

The United Auto Workers and General Motors resumed negotiations for a new labor contract on Wednesday, five days past the expiry of the previous pact.

GM and UAW negotiators broke off their talks on Tuesday at around 9 p.m. EDT and returned to the bargaining table on Wednesday morning, a person familiar with the talks said.

Since Monday, bargaining has shifted into a deliberative and slower-moving phase as both sides stepped away from the kind of round-the-clock sessions that the automakers and the union have used in the past to hasten a deal.

UAW President Ron Gettelfinger and Vice President Cal Rapson, who are leading the union negotiations with GM, have cautioned that the union would set a firm deadline for talks to conclude if progress stalls. GM employees, meantime, continue to report to work as usual.

The outcome of the contract talks is seen as crucial to efforts by the three Detroit-based automakers -- GM, Ford Motor and Chrysler -- to recover from combined losses of $15 billion last year and sales difficulties that have driven their slice of the U.S. market below 50%.

Representatives from the UAW and GM declined to comment on the content of the private talks.

The union has indicated a willingness to agree to a cost-saving fund for health care and lower wages for new hires, but has insisted it needs job-security provisions in return, a person familiar with the union's stance said on Monday.

Any tentative pact would have to be ratified by a majority of GM's 73,000 union-represented workers.

GM, Ford and Chrysler said before talks began that they were seeking sweeping concessions from the UAW to close a cost gap with Toyota Motor they say amounts to more than $30 per hour for the average factory worker.

The early stages of the labor talks focused on a plan to allow GM to cut billions of dollars in expenses for retiree health care by paying into a new UAW-aligned trust fund, according to people close to the talks.

Wall Street analysts have been optimistic GM would clinch a deal to slash health-care costs totaling $4.8 billion in 2006. GM's unfunded liability for such costs has been estimated at more than $50 billion.

GM and UAW had discussed how fully GM should be required to fund a special trust -- known as a voluntary employee beneficiary association, or VEBA -- in exchange for clearing that overhang from its balance sheet.

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