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GM strikes UAW deal

Not happy: UAW website shows General Motors workers on strike this week.

General Motors and US auto workers agree on tentative new national labour contract

General Motors logo27 Sep 2007

AMERICA’S biggest strike in more than three decades ended yesterday when the powerful United Auto Workers union tentatively agreed to a new national labour contract covering about 74,000 General Motors employees.

The UAW-represented workers staged a mass walk-out earlier this week after responding to a call to walk off the job over issues including job security, wages and entitlements and investment in US facilities and vehicles.

The move shut down GM plants across the US this week, but was ended when the new agreement reached in Detroit yesterday, which is subject to UAW member ratification, delivered the job security guarantees the union had demanded.

In addition, the agreement calls for the creation of a new Voluntary Employee Benefit Association (VEBA) trust, which will take over responsibility for GM's retiree health-care liabilities.

According to GM, the new national agreement paves the way for the world’s largest car-maker to significantly improve its manufacturing competitiveness, thereby providing the basis for maintaining and strengthening its core manufacturing base in the US.

“There's no question this was one of the most complex and difficult bargaining sessions in the history of the GM/UAW relationship,” said GM chairman and CEO Rick Wagoner yesterday.

“I'd like to thank UAW president Ron Gettelfinger, UAW vice-president Cal Rapson and their bargaining team for their leadership and hard work in negotiating the agreement.

“This agreement helps us close the fundamental competitive gaps that exist in our business. 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.” Details of the agreement remain thin on the ground and GM is expected to reveal its financial impact once it is ratified by union members. However, US sources have indicated that instead of wage increases, workers will get an initial lump-sum payment, followed by subsequent bonuses in the second, third and fourth year.

According to thecarconnection.com, GM is also expected to transfer enough cash into the new trust to cover about 70 per cent of the current healthcare liabilities, which are estimated to exceed $US50 billion.

“We feel very good about this agreement,” said UAW president Ron Gettelfinger, who had previously sought commitments by GM to build more passenger cars in the US, including a new generation of compact cars and the 2010 Chevrolet Volt hybrid.

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