Contract talks with GM continue into 7th day

The agreement with GM is likely to be the pattern for
contracts at Ford and Chrysler.

COMBINED DISPATCHES

DETROIT — The outcome of contract negotiations between the United Auto Workers and General Motors Corp. could determine how many vehicles GM builds in the U.S. and the size of the UAW rank and file.

Talks between the two sides have continued six days past a contract expiration — an indication that both sides know they face a critical juncture. GM is seeking major concessions on labor costs, while the union is trying to stem an alarming loss of jobs that began in the early 1980s.

Negotiators trying to craft a new contract, are still discussing the automaker’s proposal to pay the union to form a trust and take over the company’s huge retiree health care obligation, according to two people who have been briefed on the talks.

The people, who spoke on condition of anonymity because the talks are private, said noneconomic issues, which include grievance procedures, absenteeism and other items, had been settled.

The discussions about the trust took place even though UAW President Ron Gettelfinger on Tuesday rejected a GM offer on the trust, called a Voluntary Employees Beneficiary Association, or VEBA, according to one of the people briefed on the talks.

“I can tell you it’s being worked on,” the person said Thursday.

GM, which has been picked by the union as the lead company and potential strike target in this year’s bargaining, badly wants the UAW to agree to the trust. Whatever agreement is reached with GM likely would be used as a pattern for the other two Detroit automakers, Ford Motor Co. and Chrysler LLC.

David Cole, chairman of the Center for Automotive Research, thinks GM is holding the stronger cards. He says the UAW has to help GM lower its labor costs or the union faces a “doomsday scenario” in which more jobs will go to other countries.

“What’s at stake is whether GM will be competitive with wages and benefits,” he said.