General Motors and the United Auto Workers have come to agreement to end a two-day strike that saw 73,000 workers walk out. The two sides reached a tentative accord that could effectively allow GM to operate with a cost structure similar to Toyota and other Asian rivals.
The four-year deal relieves GM of nearly $50 billion in future health costs for retirees. “I think our retirees will be exceptionally pleased with this contract,” UAW President Ron Gettelfinger told CNN. “For active members, there will be some changes. I think overall they will be very, very pleased with the outcome of these negotiations and the job security associated with it.” Retiree health care was the centerpiece of the negotiations.
Although details of the agreement remain unknown, it should also allow GM to reduce the $25 to $30 an hour labor gap that separates the U.S. automaker from its Japanese counterparts. In return, the UAW received what Gettelfinger describes as “outstanding” job security for U.S. workers.
“This agreement helps us close the fundamental competitive gaps that exist in our business,” GM CEO Rick Wagoner said. “The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments.”
“There’s no question this was one of the most complex and difficult bargaining sessions in the history of the GM/UAW relationship,” said Wagoner. “I’d like to thank UAW President Ron Gettelfinger, UAW Vice President Cal Rapson and their bargaining team for their leadership and hard work in negotiating the agreement.”
The UAW is expected to ink similar deals with Ford and Chrysler .
“We’re proud of this tentative agreement and we look forward to getting into the field and discussing it with our membership,†Gettelfinger said.
“We reached this agreement because of the extraordinary solidarity of our membership, and through a tremendous amount of hard work by the committee they elected to negotiate a new contract,†said VP Cal Rapson.
The agreement is subject to UAW member ratification. The UAW International Executive Board and the UAW GM National Negotiating Committee — made up of elected representatives from UAW GM locations throughout the country — have unanimously recommended ratification of the agreement.
