GM Workers Back On The Job

Some 9,000 United Auto Workers are back on the job at two General Motors plants in Flint, Mich.,CBS News Correspondent Maureen Maher reports. Workers there overwhelmingly ratified new contracts Wednesday, putting an official end to the strike that crippled the company.

Second-shift workers at the two Flint parts plants began streaming in just after ratifying the deal. It was a long seven weeks for the striking workers and just about everybody was happy to get back to the assembly line.

Earlier Wednesday, the two locals overwhelmingly approved the settlement, which includes new provisions for dealing with any future conflicts between the two sides.

GM said the first assembly plants will be reopened Friday. They are the Janesville, Wis., factory that makes full-size sport utility vehicles; the two plants in Lansing, Mich., that make the Oldsmobile Alero and Pontiac Grand Am, and the Cadillac plant in Detroit.

Meanwhile, GM telling its biggest investors that the deal that ended the costly walkouts also includes a union pledge not to strike again before a new national contract is signed late next year.

"Unless something goes seriously awry, they'll have labor peace for the next 18 months until the next national contract is signed, sealed and delivered," said analyst Nick Colas of Credit Suisse First Boston.

GM was advising institutional investors that the no-strike deal between the automaker and the United Auto Workers was a handshake agreement that bought the company labor peace at least until the current three-year national contract is replaced.

A GM official who spoke on condition of anonymity confirmed the deal, but union officials insisted the no-strike pledge only covered GM's two brake plants in Dayton, Ohio.

"There is no guarantee at any other location that there will be no strikes," UAW Vice President Richard Shoemaker said. "It is our hope there will not be."

Before the settlement, the union had threatened to call additional strikes at the Saturn plant in Tennessee, the Chevrolet Corvette plant in Kentucky, and at a plant that makes big sport utility vehicles in Wisconsin.

The settlement ended walkouts that began June 5 and 11 at the two aging parts plants in Flint.

The deal does not resolve long-term problems between the company and its biggest union. And the short-term pledge of peace came at an incredibly stiff price: an estimated $2.6 billion in lost profits.

"I can't find much of anything that GM management got out of the settlement that they couldn't have gotten back in June," said analyst David Healy of Burnham Securities Inc. "There's certainly nothing worth $2.6 billion."

Harley Shaiken, a labor professor who follows the UAW from the University of California at Berkeley, said GM miscalculated the union's resolve.

"The strikes antagonized the union and may have damaged the company in the marketplace" Shaiken said. "I suspect that while the corporation knew there would be a strong response, it underestimated the intensity."

Analysts had endorsed GM's effort to fight the strikes, hoping it would spur the No. 1 automaker to initiate deep cuts they believe are needed to make GM more productive and profitable.

GM remains the least productive of the major automakers, relative to its declining market share. While it has trimmed its work force considerably through attrition, industry analysts say it still needs to cut about 50,000 jobs to match its competition.

But as more jobs have gone unfilled at many plants, the number of GM-UAW confrontations has escalated. The union has hit GM with 22 local walkouts since 1990, while Ford Motor Co. and Chrysler Corp. have enjoyed nearly strike-free relations with the union.

Wall Street will be looking to Monday's meeting of the GM board for some sign that the company is serious about cutting costs and restructuring its vast North American operations. Plant closures and killing off slow-selling model lines are among the topics expected to go before the board.

In announcing the deal, UAW and GM leaders made much of a promise to hold frequent, high-level talks aimed at resolving local disputes before they deteriorate into strikes.

But such promises have been made before by previous GM leaders.

"They're going to need to do something," said Daniel Kruger, a labor relations professor at Michigan State University. "The scars are very, very deep and it's going to take a lot of nurturing to fix this relationship."

Neither side emerged with a clear-cut advantage in the settlement. The union, while it made some gains, acknowledged that most were only temporary. "I don't think anybody won," UAW President Stephen Yokich said.