Union Reaches Deal with Largest US Automaker

Topics:  General Motors, UAW

Alex Villarreal
September 26, 2007

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Union employees of the largest U.S. automaker, General Motors, are back to work after ending a two-day strike over stalled contract talks. VOA's Alex Villarreal reports from Washington.

Members of the United Auto Workers called an end to their strike against General Motors early Wednesday, after the two sides reached a tentative contract agreement.

More than 73,000 GM workers walked off their jobs Monday at about 80 facilities across the United States, after talks broke down over job security and healthcare.

United Auto Workers President Ron Gettelfinger says the strike was beneficial in bringing a quick end to the negotiations. He said the union is pleased with the results.

"We successfully resolved a lot of difficult issues," said Gettelfinger. "This bargaining committee gave it their all. We feel very good about this tentative agreement."

The deal creates a GM-funded, union-run trust fund to administer retiree health care. General Motors proposed the trust to cut its healthcare costs. The company has been seeking labor concessions to close a more than $25 per hour labor cost gap with its Japanese competitors, such as Toyota and Honda.

In a statement, GM chairman and CEO Rick Wagoner said the agreement will help the company close such gaps and improve its manufacturing competitiveness. He said competitive improvements will allow General Motors to maintain a strong manufacturing presence in the United States.

UAW's Gettelfinger says the healthcare fund, called a Voluntary Employees Beneficiary Association, or VEBA, will also help GM employees.

"I am pleased to say that we have a VEBA in place that will secure the benefits of our retirees," he said.

The new national contract is still subject to review by local UAW presidents and union members. Once ratified, the deal must be approved by the courts and the Securities and Exchange Commission.

The UAW's two-day strike shut down three plants in Canada and caused industry analysts to predict massive financial losses for General Motors if it continued.

This was the union's first nationwide strike against General Motors in 37 years.

In 1998, a UAW walkout at two GM parts plants in Flint, Michigan, shut down production and caused sales to plummet.

General Motors is undergoing a massive restructuring in the face of a steady loss of market share to its Asian competitors. The company has been forced to close dozens of plants across the country and says it is still not profiting from its North American operations.