Special Report

UAW logo2007 UAW
Labor Talks

Local leaders for the United Auto Workers unanimously approve a tentative labor agreement with General Motors Corp., a step that clears the way for a vote on the pact by the union’s 73,000 members.

“It had more than I thought we’d get,” says Chris “Tiny” Sherwood, president of UAW Local 652 in Lansing, MI, in an interview with the Associated Press. “I think the membership will buy it.”

The deal, which industry insiders consider historic, includes a new health-care trust for retirees funded by GM that the UAW will manage. Dow Jones reports GM’s initial contribution to the fund, called a Voluntary Employees’ Benefit Assn. (VEBA) will total $29.9 billion.The auto maker will kick in an additional $5.4 billion in the future.

GM also will back the trust with annual contributions of as much as $165 million over the next 20 years. The safety net will not exceed $1.6 billion, Dow Jones says, citing a document distributed to local leaders by the UAW.

To gain the VEBA, GM made job commitments to the UAW. One of them reportedly is a pledge to move production of its Pontiac and Saturn roadsters from Delaware to Bowling Green, KY. GM also promises the upcoming Chevrolet Volt plug-in hybrid’s assembly to a plant in Detroit, Dow Jones says.

GM reportedly will offer signing bonuses of $3,000 to workers, as well as lump-sum payments in coming years. In return, some new hires will receive a lower hourly wage of $14-$16. Workers also will get 401(k) benefit packages, Dow Jones says.

UAW rank-and-file at GM will vote on the contract in October.

GM and the UAW reached the tentative agreement the morning of Sept. 26, after a 2-day strike by the union halted production at the auto maker’s plants across the nation.