Relief Coupled With Anxiety As GM Inks Deal With Union
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DETROIT — As the ink dries on the new four-year contract between General Motors Corp. and the United Auto Workers, retirees, workers, Ford, and Chrysler are all anxious to see the details of what could be a watershed pact for the industry.
For retirees, there’s uncertainty about how the union will manage their health care. To the rank-andfile, there’s the hope that a twoday strike was enough to bring promises from GM to build new vehicles at their factories, keeping them employed for years.
Even GM executives must be wondering whether there’s enough cost savings to make them competitive with the Japanese.
“There is a lot of relief, but that’s coupled with anxiety to see details of the agreement,” auto worker Tom Brune said yesterday as he stood next to a pile of strike placards at the union hall near a GM plant in Wentzville, Mo.
Union and company bargainers struck the tentative deal just after 3 a.m. yesterday after bargaining for about 18 hours, but they gave few details. It still must undergo the scrutiny of local union presidents and a vote of GM’s UAW members, which is likely to take place this weekend.
The big detail that the company and union confirmed, though, was that the union will take money from the nation’s largest automaker to form a trust that would handle payments for retiree health care.
Several industry analysts said the agreement would shape contracts with GM’s Detroit-area competitors, Ford Motor Co. and Chrysler LLC. It’s also likely that the deal will frame other American labor contracts, the analysts said.
“We view the tentative agreement and its apparent terms as a historic milestone toward the long-term improvement in fundamentals and survival at the North American automakers,” KeyBanc analyst Brett Hoselton wrote in a note to investors.
GM and the union praised the agreement, with the company saying it goes a long way toward cutting about a $25-per-hour labor cost gap between GM and Japanese automakers with American factories. GM has said it pays workers $73.26 an hour in wages and benefits. The company lost $2 billion last year and is in the midst of a restructuring.
