GM, Union Talks Resume Second Day After Deadline


Contract talks between General Motors and the United Auto Workers union resumed late Sunday morning after negotiators talked all day Saturday, a person familiar with the talks said.

Negotiators for both sides adjourned the bargaining session at around 9 p.m. EDT Saturday and were back at the table around 11 a.m. EDT, a source close to the talks said on Sunday.

Sunday marks the fourth day of a marathon bargaining session aimed at clinching a new labor contract for the largest U.S. automaker.

The union had agreed to extend its now-expired contract on an hour-to-hour basis late Friday. One official at a union local said he was told Sunday morning he would get hourly updates throughout the day and was asked to stay ready for a possible strike, but added there were no other instructions that indicated an imminent strike.

While progress was made on some areas of the contract on Saturday afternoon, major issues remained unresolved, said the person close to the talks on Sunday.

The chief executives of Detroit's Big Three auto makers on Saturday spoke via a conference call about the ongoing contract talks, a person familiar with the meeting told Reuters.

GM Chief Executive Rick Wagoner, Ford CEO Alan Mulally, Chrysler CEO Robert Nardelli and Chrysler President Tom Lasorda were on the call, the person said.

GM and Chrysler LLC declined to comment while spokespeople from Ford Motor Co <F.N> could not be immediately reached.

It is not unusual for the three companies to talk about common interests during the contract talks, the person, who requested anonymity, said.

As the UAW's bargaining target, GM would be negotiating a contract that would be used as a pattern for the union's talks with Ford and Chrysler.

The early stages of the labor talks had focused on a complex 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.

Continuing negotiations between GM and UAW have stoked expectations the two sides were nearing a deal after eight weeks of bargaining and a strike appeared to be unlikely.

GM Workers Asked to Report to Work

Some union locals, who have readied workers to walk pickets, opened up the halls on Sunday after closing them Saturday night.

Late on Saturday, UAW Local 276 representing workers at GM's Arlington assembly plant told its members that a strike was not imminent as the bargaining team will be meeting through the weekend.

"All employees at the General Motors Assembly Plant in Arlington, Texas ... are instructed to report to work at your normal time on Monday, September 17, 2007," the union told its members in a bulletin that was posted on its Web site.

More than 70 union-represented facilities were set to shift back into operation on Monday.

The contract talks have taken some unexpected turns in the past few days.

After hitting an apparent snag in talks, the UAW singled out GM as its "strike target," a term it had avoided in more collegial negotiations in 2003.

Rival automakers Ford Motor Co. and privately held Chrysler LLC quickly signed contract extensions with the UAW, clearing the way for their factories to keep operating.

The Detroit-based automakers lost more than $15 billion in 2006 and have cut more than 80,000 jobs through buyouts driven by plant closings. Given the industry's weakness, analysts have viewed a strike as unlikely.

The last major UAW strike against GM was in 1998, when a walkout shut down almost all of the automaker's assembly plants, causing sales to plummet. GM never recovered its pre-strike U.S. market share of 31 percent and has lost about 7 percentage points since.

Wall Street analysts have been optimistic GM would clinch a deal to slash health-care costs totaling $4.8 billion in 2006.

Ford and Chrysler LLC were also in talks with the UAW to establish such a trust, sources have said.

GM's unfunded liability for such costs has been estimated at more than $50 billion.

GM and UAW have been sparring over 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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