A two-day strike, the first U.S.-wide strike against an automaker in 31 years, has made the United Auto Workers and General Motors Corp. agree Wednesday to a tentative contract that puts the responsibility for retirees' health care into the union's hands.
The two sides confirmed that the deal creates a company-funded, union-run trust to administer retiree health care. The two sides gave no other details, but a person briefed on the contract told The Associated Press that it also would give workers bonuses and lump-sum payments. The person requested anonymity because the contract talks are private.
The union said the deal was reached shortly after 3 a.m. (0700 GMT).
The contract must be reviewed by local UAW presidents and will then be subject to a vote of GM's 73,000 rank-and-file members. The agreement is expected to set a pattern for contracts at Ford Motor Co. and Chrysler LLC.
The deal means UAW will tell workers to head back to their jobs at around 80 GM facilities across the nation. The union went on strike at 11 a.m. Monday when talks broke down.
It was the first nationwide strike during auto contract negotiations since 1976, when Ford Motor Co. plants were shut down.
The deal includes GM's top priority in the negotiations - shifting most of its US$51 billion (EUR36 billion) unfunded retiree health care obligation to a UAW-run trust. GM would pay about 70 percent of the obligation into the trust, called a Voluntary Employees Beneficiary Association, or VEBA, the person briefed on the talks said.
The union would then invest the money and take over health care responsibilities for about 340,000 GM hourly retirees and spouses.
"I'm pleased to say that we have a VEBA in place that will secure the benefits of our retirees," UAW President Ron Gettelfinger said at an early morning news conference inside the union's Detroit headquarters.
Gettelfinger said he is confident of ratification and that voting likely will start as soon as this weekend.
Union leaders will be briefed on Thursday and Friday, he said.
The union also expects to decide Thursday what automaker it will negotiate with next.
"There's no question this was one of the most complex and difficult bargaining sessions in the history of the GM-UAW relationship," Rick Wagoner, GM chairman and chief executive, said in a statement.
The strike also affected GM plants and suppliers at locations where workers are not represented by UAW.
The person briefed on the talks said that because GM's pension fund has more money than its expected obligations, both sides agreed to tap into it to fund the trust.
Retirees would get a pension increase, but it would be offset by an equal increase in health care contributions, the person said.
Wages would stay the same for the length of the four-year deal, but workers would be given a bonus or lump sum payments every year, the person said. The size of the payments was not immediately available.
GM made no specific commitments to build cars and trucks at U.S. factories, but generally agreed that with the reduced costs from the new contract, investment in the plants would make good business sense, the person said.
The pact also includes a lower wage structure for newly hired workers in certain non-manufacturing jobs, the person said, adding that in order to make way for the new hires, GM would offer early retirement and buyout packages to workers now in the positions.
The deal also includes language that mitigates the impact of the jobs bank, in which the company pays laid-off workers most of their salary and benefits, said the person, who did not know the specifics.
Lloyd Coleman, 64, of the Detroit suburb of Taylor, was working his first picket line shift when he got word early Wednesday of the tentative agreement. He said he was glad to hear that an agreement had been reached, but was withholding judgment until further details were released.
"I'm just wondering what we are giving up," said Coleman, a 31-year GM employee. He said his biggest concerns include health care and bringing new products to existing GM plants.
Coleman said the VEBA holds promise.
"It's a big burden off the company," he said. "If it's managed right, it will be OK."
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