UPDATE 12:32 p.m.: The issues were NOT resolved, and the UAW is on strike – their first against GM in almost ten years, and their first national strike against a US automaker since 1976.
The United Auto Workers have set an 11 a.m. strike deadline for today in their ongoing dispute with General Motors, although a deal is apparently close at hand which would solve GM’s main concern over retiree health costs, Jeffery McCracken and John D. Stoll report for Online Journal:
The United Auto Workers set a deadline of 11 a.m. EDT today to conclude a new national contract with General Motors Corp., following weekend negotiations that appeared to be on track to produce a groundbreaking labor deal.
The talks still could encounter obstacles, even though people familiar with the situation indicated that a framework for dealing with the main issue of retiree health care was in place, and that bargaining yesterday had shifted to other issues. One key issue is the size of a cash bonus GM will give 73,000 active workers in exchange for ratifying a deal, these people said.
Read the full article at the above link. GM will be paying current workers a cash bonus for approving the new contract . . . Brilliant!
Seriously, the “retiree health costs” issue is rampant among older manufacturing firms. Beginning in the late 1960s, companies began “guaranteeing” deferred benefits to retirees in lieu of wage and benefit increases for their current workers, effectively putting off the costs of the contract to future decades. Unfortunately, in many cases the promised benefits cannot be met indefinitely without bankrupting the companies – and you can’t collect anything from nothing.
The steel industry will likely have to be rescued by some arrangement including partial government bailouts, for example, within a few years. Bully for General Motors if they’ve convinced current workers to throw over the retirees. Gary Cowger may have earned himself a nice raise . . .