GM Union Workers Ratify 4-Year Deal

UAW's Historic Contract With General Motors Establishes Lower Pay For Some Workers

(AP)  The United Auto Workers union with locals across Ohio said Wednesday it has ratified a four-year contract with General Motors that sets lower pay for some workers and puts GM's massive retiree health care debt into a UAW-run trust in exchange for promises of future work at U.S. plants.

Sixty-six percent of production workers voted in favor of the deal, while 64 percent of skilled trades workers approved it, the UAW said in a statement.

The UAW locals in Ohio represent workers at the Lordstown assembly and fabrication plants, the Toledo Transmission plant, the Parma Metal Center near Cleveland, a distribution site in West Chester near Cincinnati, the Mansfield Metal Center, a transmission plant in Defiance, and the ACDelco operation in the Columbus suburb of Groveport.

The two sides settled on Sept. 26 after a two-day nationwide strike.

UAW President Ron Gettelfinger said in the statement that the agreement protects jobs, wages and benefits for active and retired workers.

"And we helped protect middle class manufacturing jobs in communities throughout the United States," Gettelfinger said.

Vice President Cal Rapson said the union's bargainers "resisted the company's repeated attempts to take, take, take."

Also in a statement, GM Chief Executive and Chairman Rick Wagoner thanked the UAW for reaching an innovative agreement "that effectively addresses the needs of our employees and retirees, while providing a basis for improved competitiveness that will support future U.S. investments."

The pact covers more than 74,000 active workers and about 340,000 retirees and surviving spouses. The deal will expire on Sept. 14, 2011, the union said.

Under the contract, GM would put its retiree health care obligations into a trust to be managed by the UAW. The trust is known as a voluntary employees beneficiary association, or VEBA. GM has approximately $51 billion in unfunded retiree health care debt but isn't required to put the entire amount into the VEBA.

GM would put $24.1 billion into the VEBA in January 2008 and pay an additional $5.4 billion to cover retirees' health care costs until the VEBA takes over in 2010. GM also would contribute a $4.37 billion note convertible to GM stock and would make a maximum of $1.6 billion in payments to the VEBA anytime the fund's level is insufficient to provide benefits for at least 25 years.

The deal also has a lower-tiered wage scale for some workers who don't build vehicles, and GM promised new products for 16 assembly plants.

It also includes a $3,000 signing bonus the first year and annual lump sum payments in the remaining years of the pact. The union says a typical assembler will gain $13,056 during the life of the agreement.

GM's biggest Ohio employee base is Lordstown, which has 2,400 assembly plant and 1,200 fabrication plant workers in a sprawling complex located along the Ohio Turnpike about 40 miles southeast of Cleveland. The plant makes the Chevy Cobalt and Pontiac G5.