GM, UAW Agree On Tentative Contract
Deal Ends Nationwide Strike, Heath Benefits-For-Retirees Program Created
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Play CBS Video Video GM Strike Ends A three-day lockdown at GM has ended as the United Auto Workers struck a tentative deal with management that will see over 70,000 workers return to their jobs. Dean Reynolds reports.
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United Auto Workers President Ron Gettelfinger, at UAW Solidarity House in Detroit, talking to reporters about the tentative contract reached with General Motors just after 3 a.m. on Sept. 26, 2007, ending a two-day-long strike. (AP)
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Jim Littell of Flushing Township, Mich., waves to passing motorists in front of Flint Engine South shortly after the announcement of a tentative agreement between the United Auto Workers union and General Motors that ends a two-day national strike, the first against the automaker in 37 years, and puts responsibility for retirees' health care into the union's hands. (AP)
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Dan Maloney, right, of the negotiating committee of Rochester, N.Y., hugs Alfonso Guzman of Detroit at the UAW Solidarity House after an tentative agreement with General Motors was announced in Detroit, early Wednesday, Sept. 26, 2007. The UAW and GM said Wednesday they have reached a tentative contract agreement that ends a two-day nationwide strike immediately. (AP/Detroit Free-Press, Mandi Wright)
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Photo Essay GM Workers Strike Auto workers walk off job at General Motors plants nationwide.
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Interactive On The Job Explore America's labor economy, track recent major layoffs and meet key economic players.
The two sides tentatively agreed Wednesday to a groundbreaking agreement that allows GM to move its unfunded retiree health care costs into an independent trust administered by the UAW. The union also agreed to lower wages for some workers.
That alone should save GM about $50 billion and means that there should be no immediate effect on the price of one of their cars, reports CBS News correspondent Dean Reynolds.
In exchange, the UAW won commitments from GM to invest in U.S. plants, bonuses and an agreement to hire thousands of temporary workers which will boost UAW membership, according to a person who was briefed on the contract. The person requested anonymity because the details haven't been publicly released.
Wall Street applauded news of the deal, sending GM shares up more than 9 percent.
The union said the agreement with the nation's largest automaker was reached shortly after 3 a.m. The UAW canceled its two-day strike about an hour later and workers were back in GM's 80 U.S. facilities Wednesday afternoon. GM lost production of around 25,000 vehicles due to the strike, according to CSM Worldwide Inc. Analysts had suggested a short strike could actually improve GM's outlook because it would cut back on inventory levels.
GM shares rose $3.22, or 9.4 percent, to $37.64. Standard & Poor's Ratings Services said it may raise GM's long-term debt rating, which is currently below investment grade.
"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.
The agreement is expected to set a pattern for contracts that now will be negotiated at Ford Motor Co. and Chrysler LLC. UAW President Ron Gettelfinger said he will decide this week which automaker will go next. The UAW may even conduct negotiations with Ford and Chrysler simultaneously, Gettelfinger said during an interview on "The Paul W. Smith Show" on WJR-AM.
The GM contract will be reviewed by local UAW presidents this week and will be subject to a vote of GM's 74,000 rank-and-file members. Voting is expected to begin this weekend, Gettelfinger said. If members vote against the agreement they could go back on strike, but Gettelfinger said he's confident it will be ratified.
"We're very comfortable with this agreement and we're happy to be able to recommend it to our membership," Gettelfinger said.
Tom Brune, who works at a GM plant in Wentzville, Mo., said he was happy to go back to work.
"There is a lot of relief, but that's coupled with anxiety to see details of the agreement," Brune said as he stood near a pile of strike placards at UAW Local 2250.
GM and the UAW said the tentative contract includes the health care trust but said they wouldn't release more details until the contract is ratified.
"This agreement helps us close the fundamental competitive gaps that exist in our business," Chairman and Chief Executive Rick Wagoner said. "There's no question this was one of the most complex and difficult bargaining sessions in the history of the GM-UAW relationship."
GM, which lost $2 billion last year and is in the midst of a restructuring, went into the negotiations seeking to cut or erase what it said is about a $25-per-hour labor cost disparity with the U.S. employees of Japanese competitors. GM has said it pays workers $73.26 an hour in wages and benefits.
By contrast, Reynolds reports, Toyota pays an hourly wage of $45.
The University of Maryland's Peter Morici told Reynolds that even with lower labor costs, U.S. automakers still need to work on building cars that consumers want to buy.
"In order to sustain higher labor costs you really have to have a superior product. General Motors and Ford simply don't have products that are superior to Toyota to sustain a higher labor cost."
© MMVII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
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See all 34 Comments**** TAKE AMERICA BACK ****
**** STOP THE WAR & Corporate Corruption****
He has NEVER voted:
* to raise taxes
* for an unbalanced budget
* to raise congressional pay
* for a federal restriction on gun ownership
* to increase the power of the executive branch
He HAS voted:
* against the Iraq war
* against the inappropriately named USA PATRIOT act
* against regulating the internet
* against the Military Commissions Act
He will eliminate the IRS, Wasteful Government Spending & Stop The Iraq War Immediately!
Most importantly, he voted NO on anything in Congress that is not allowed by the Constitution.
He is the only candidate not a member of the CFR!
Shouldn''t ALL members of Congress uphold the Constitution? Aren''t they SWORN to uphold it? You can bet Paul WON''T call the Constitution "just a G**D***ed piece of paper" like George Bush is reported to have.
If you want a candidate you can TRUST due to a proven track record, visit www.ronpaul2008.com and get busy spreading the word. The Mainstream Media is Blacking Out The Truth Spoke By Ron Paul!
Join The ReVoLuTiOn In Your City Stand Up America:
http://ronpaul.meetup.com/cities/
Also checkout http://www.youtube.com search for: RON PAUL
I am curious to see where all this new found money will really go and how fast it will disappear over the next thirty years. They won%u2019t do it fast that is too obvious it will be done slow and over time and the VEBA will be bankrupt.
www.poconocommunitynews.com
pays better than going to work. i earn my welfare.
my charity check. its hard work doing nothing.
its a tuff life being born with a disability.
rush limbaugh complains about having to support
people who cannot support themselves. well, if
you wanna go back to that system fine. i just
adapted to the one that''s in place here in the
union of soviet america. its been that way since
about 1953 when the soviets won the korean war,
and the cold war. we''re no more a free country
than a man in the moon. in real 1967 money, 73
dollars an hour is about 6 dollars an hour in
1967. go unions go, keep raising the cost of
living. higher and higher and higher. you''re
just pedaling to keep up like the rest of us. you
think things are bad? go review old films of
the Great Depression. it''ll blow your mind.
we''re in heaven, honey bunnies compared to then. yay.
http://ronpaul.meetup.com/cities/
He Will Eliminate the IRS! And Stop The War In Iraq Immediatley! Restore And Protect America From Illegal Immigration! http://www.ronpaul2008.com/issues
You say unions are corrupt. And corporations aren''''t corrupt too? Organizaions are sometimes corrupt, whether they be companies or unions, that''''s just the way it is. That doesn''''t mean all unions are corrupt, just like all companies aren''''t corrupt either. You don''''t throw out the baby with the bath water.
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Posted by rafterman1 at 11
1. I love the American worker, just hate blackmailing, crime ridden unions
2. There is no "picking", except for your nose. Unions, and their members are socialists perverting the capitalist society in America.
3. Unions are crime families.
entire picture, treaties like NAFT and GATT are where the issue should be
addressed, our presidents of the last 30 years along with the House of
representatives have sold us out with faulty trade agreements that are at
best one sided and designed to bring hugh profits to world bankers and
globalist, these people are guilty of TREASON and history will one day
record it as such.
Our leaders have successfully helped communism do with out firing a
shot what many wars could not accomplish, ask yourself who has really
profited from these agreement, who owns who?, we are deeply indebted to
none other than Communism ; who now has enough wealth to buy our assets
without so much as a threat from our representatives.
http://www.youtube.com/watch?v=IWfIhFhelm8
Join The ReVoLuTiOn In Your City Today Take A Stand:
http://ronpaul.meetup.com/cities/
GM needs to get with Humana (health insurance) and they can save you millions. Humana has a division that focuses on getting retired employee''s off of retirement group plans and on to medicare / medicare supplements. The retired employee''s have insurance (medicare)and they pay for medicare supplements thru social security. They are removed from the group plans and GM saves millions because the group plans are re-rated without the aging unhealthy individuals that raise the group rates for employee''s currently working for GM.
It is not realistic to pay for your retired employee''s health insurance! Medicare is designed to cover those 65 and older that do not have insurance.
It is just as much GM''s fault as it is the UAW!
The model that American automakers have lived by is broken like George Bush!
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Posted by rationalL7 at 10:17 AM : Sep 26, 2007
You failed to mention that Packard no longer exsits.
Seen in the news that GM is worth 22 Billion, and Google is worth $177 Billion, Something is out of wack here, when a search engine is worth more a car company!
For example Ford''s CEO last year earned 26 million dollars or a little more give or take and last year Ford lost 10+ Billion dollars and they laid off around 40,000 workers. Why because they say they can not compete. Wait a minute that is a lie they don''t want to compete they want to enrich themselves morons. Here is the fact we are the most technological nation in the world with the best infastructure for those of you who don''t know what that means we have the best roads and transportation in the world to move things. So with technology and infastructure we can move products and create products for less but our business leaders don''t want to upgrade because it takes away from there bonuses (less money in their pockets).
There of course is not easy solution but by and far it is not the unions fault they are trying to protect their workers from the sweat shops that would come back to America if they did not exist.
Of course fascists can''t think any further in to the future than yesterday. So as McVet says seig heil.
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