GM, UAW Negotiate for First Time Against Specter of Arbitration

DETROIT – When General Motors and the United Auto Workers union enter into formal national contract negotiations in the coming days, the two sides will bargain for the first time against the specter of game-changing arbitration.

If the negotiators cannot reach an agreement by the Sept. 14 deadline, the fate of GM’s massive post-bankruptcy restructuring and thousands of future UAW jobs could be left in the hands of a third party.

A person familiar with the situation tells Ward’s the auto maker will approach the talks with the goal of meeting the deadline for a formal agreement and avoiding arbitration altogether, a unique wrinkle imposed on the 2011 negotiations by the U.S. government during GM’s taxpayer-funded reorganization two years ago.

The labor talks will not lose their sense of urgency, the source says, even with a no-strike clause in the mix, a caveat placed on the UAW by the Obama Admin. in 2009.

“There’s going to be a sense of urgency to meet the date. (GM) will push for Sept. 14,” the source says, noting contract negotiations are notorious for running past their deadlines.

Should the talks run past the deadline date, they will be extended before calling in an arbitrator. However, either side could make the call, although the details of pursuing the third-party route remain a topic of informal discussions between GM and the UAW.

Chrysler, which like GM received a taxpayer bailout, also will negotiate with the possibility of arbitration and with a no-strike clause.

UAW Vice President Joe Ashton, who heads labor’s GM unit, said earlier this week government-imposed rules such as the no-strike clause change the nature of the talks. “It makes it more difficult. But at the same time, it’s part of what the government decided on and we’ll work through it.”

Fiat earlier today acquired Canada's 1.5% stake in Chrysler and completed its acquisition of the U.S. Treasury’s 6% stake for a total transaction price of $625 million. However, the Treasury still holds a 33% stake in GM, down from 62% when the auto maker conducted its initial public offering last year.

Ford and the UAW will bargain without any imposed stipulations because the auto maker did not take a government bailout.

Despite the government’s heavy ownership of GM stock and its key role in saving the auto maker from potential liquidation with the bailout, the White House so far has not inserted itself into negotiations, the source tells Ward’s.“I have not seen it.”

But a major impasse could be on the horizon. The UAW’s Ashton repeatedly has said the union will want job pledges from the talks. GM says any fresh reinvestment, such as restarting idled plants in Spring Hill, TN, and Janesville, WI, hinges on significant improvement in the economy.

The auto maker’s focus will be long-term competitiveness, the source confirms. “Any decisions that come out of the negotiations will be to see that GM succeeds.”

GM also will seek further relief from its annual health-care expenditures for UAW workers and their dependents, which last year totaled $665 million.

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