GM Gets VEBA, Modified Jobs Bank

PRODUCTION RESUMES AT GENERAL Motors Corp.'s 80 strikebound U.S. plants after the United Auto Workers union “recessed” its 2-day walkout by some 73,000 workers following the close of contract talks. GM lost about 12,300 units of scheduled production per day during the shutdowns, Ward's data shows.

While there were no production losses in Mexico, which accounts for 2,000 units a day, a GM spokesman says output was lost in Canada at GM's Oshawa, ON, plant No.1, which builds the Chevrolet Impala, and plant No.2 that makes the Buick LaCrosse.

When GM's inventories appeared high in June, it was believed the company was stockpiling for a possible strike. But in reality, it was the result of poor sales.

Had the UAW walkout continued, supply of GM's new Buick Enclave, GMC Acadia and Saturn Outlook CUVs would have been in jeopardy. Best-selling cars, the Impala, Pontiac G6 and Cobalt, also had dangerously low inventories.

The pact, already ratified by senior UAW leaders and awaiting approval by the rank-and-file, sets up a Voluntary Employee Beneficiary Assn. (VEBA) that “for the next 80 years” relieves GM of its health-care obligations to retirees and employees, UAW President Ron Gettelfinger says.

The VEBA reportedly could have a total value of as much as $35 billion at startup. The deal also reportedly includes a lump-sum payout to union members in lieu of an annual pay increase.

In addition, The Wall Street Journal reports the UAW has agreed to a historic 2-tier wage structure that would allow GM to pay new hires at a lower rate than current UAW-represented employees.

A “modified version” of the controversial Jobs Bank also is included. The bank supports laid-off workers by guaranteeing pay until acceptable work alternatives can be found for them at GM.