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GM-UAW Close to Retiree Health Care Deal Send a link to a friend

[September 22, 2007] DETROIT (AP) -- A week after contract negotiations went past their original deadline, General Motors Corp. and the United Auto Workers are close to an agreement on a deal that would transfer the automaker's retiree health care costs to a trust managed by the union, a person who was briefed on the talks said.

Details of the plan haven't yet been worked out, said the person, who requested anonymity because the talks are private.

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Negotiators went home Friday evening and were to meet again Saturday morning, GM spokeswoman Katie McBride said.

An agreement on the health care trust is the linchpin of the negotiations, which began in July.

UAW President Ron Gettelfinger told members Friday he was trying to speed up negotiations with General Motors and wanted to reach a contract agreement without a strike.

"We are continuing to make progress; however, we are pushing to accelerate the negotiating pace at all levels," he said in a message to UAW members. "It is our desire to reach an agreement without a strike, and we have demonstrated this by staying at the bargaining table up to this point."

Gettelfinger added that the effort to speed the talks doesn't mean any of the union's options are off the table, including the option to strike, according to the message, which was posted Friday evening on a union Web site in Oklahoma.

GM and the UAW spent Friday negotiating issues like wages and job security while experts helped finalize the possible health care deal, according to people familiar with the negotiations.

GM and the UAW have asked an independent party to review both sides' financial calculations for a historic deal that would place GM's retiree health care obligations in a UAW-managed trust, according to a local union leader who was briefed on the talks. The local leader requested anonymity because the talks are private.

In the meantime, Friday's talks focused on outstanding issues other than the health care trust, according to another person who was briefed on the talks but requested anonymity. That person said the pace of the talks has picked up and negotiators are expected to meet through the weekend. Negotiators have settled noneconomic issues such as grievance procedures but are still working through issues like pay, job security and pensions.

Local union officials said they'd gotten few updates from bargainers and expressed frustration at the long wait for a new contract. Friday marked one week since the expiration of GM's contract with the union. The UAW has been extending the contract hour by hour since then.

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Chris "Tiny" Sherwood, the president of Local 652 in Lansing, said it's unusual for the contract to be extended for so long on an hour-by-hour basis. The union is continuing to tell local leaders to have workers ready for a strike if talks break down.

"A week later we're still hanging in there," Sherwood said.

Gettelfinger said negotiators have met for 18 days straight. He said the union was releasing little information to members because the negotiations frequently change.

"We want you to know once again that we do not take your patience for granted, and GM should know not to take the patience of our bargaining committee for granted either," Gettelfinger said.

GM, which was picked by the union as the lead company and potential strike target in this year's bargaining, wants to unload $51 billion in unfunded retiree health care costs into a UAW-managed trust. Earlier this week, the two sides were still billions of dollars apart on how much GM should put into the trust. Analysts have said GM wants to put about 65 percent of its retiree health care obligation into the trust.

Ford Motor Co. and Chrysler LLC will likely match many of the terms of GM's contract once it's settled.

Protracted contract talks aren't unprecedented. In the last three negotiations - in 2003, 1999 and 1996 - the UAW settled with the lead companies within a few days of the deadline. But in 1996, the UAW's negotiations with GM dragged into November even though it reached an agreement in September with Ford.

Investors cheered the news that GM and the UAW were still talking after reports earlier in the week suggested the health care trust might be shelved. GM shares were up 50 cents, or 1.5 percent, to close at $34.97 Friday on the New York Stock Exchange.

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AP Auto Writer Tom Krisher in Detroit contributed to this report.

[Associated Press; By DEE-ANN DURBIN]

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