UAW Leaders OK New Contract With GM

General Motors Corp. will put $29.9 billion into a fund for retiree health care and guarantee that cars and trucks will be built at 16 U.S. plants as part of its tentative contract agreement with the United Auto Workers, according to a summary of the agreement released Friday by the union.

GM will pay an additional $5.4 billion to fund retiree health care while the UAW is setting up the health care trust. The formation of the trust, called a Voluntary Employees Beneficiary Association, or VEBA, was a major part of this year's contract agreement.

Under the tentative contract, 3,000 temporary workers will get permanent jobs at the full-time wage rate. There also is a moratorium on outsourcing, or hiring outsiders to do work GM employees traditionally do.

Hourly workers will get economic gains totaling $13,056 over the life of the four-year contract, the UAW said.

"It had more than I thought we'd get," said Chris "Tiny" Sherwood, president of a UAW local in Lansing. "I think the membership will buy it."

The tentative contract passed a hurdle earlier Friday when UAW officials from across the U.S. approved the pact.

UAW President Ron Gettelfinger said they will now take the pact to the 74,000-strong membership for a vote.

Gettelfinger said at a news conference that the vote would wrap up and be counted by Oct. 10.

He said he expects it to pass, although some members have concerns about its terms.

Gettelfinger also said the union had not yet picked the automaker — Ford Motor Co. or Chrysler LLC — with which it would bargain next.

If the company's UAW members ratify the deal, its provisions likely will save the company about $3 billion per year, which it can pump into the development of new products, according to several industry analysts.

The contract also includes lower wages for some new hires and offers early retirement and buyout packages to entice higher-paid workers out of those positions.

The two sides had 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.

GM shares rose $1.09, or 3 percent, to $37.55 in afternoon trading Friday.