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GM Talks With UAW Go Past Deadline
Negotiations Move Into Morning With Hourly Extension

By Sholnn Freeman
Washington Post Staff Writer
Saturday, September 15, 2007

Negotiators for General Motors and the United Auto Workers union continued to bargain past their midnight deadline this morning, apparently signaling at least some progress toward a labor contract that analysts have called pivotal for both sides.

The UAW's existing contracts with GM, Ford and Chrysler were to have expired at midnight. The union agreed Thursday to extend its accords with Ford and Chrysler but remained in intensive negotiations with GM, pressing the nation's largest automaker to reach a deal or face the possibility of a walkout by workers.

Shortly after the deadline passed, a local union official in Warren, Mich., told Bloomberg News that the two sides had agreed to extend the contract on an hour-by-hour basis.

The union had mobilized its membership yesterday in anticipation of the deadline, union officials said. Local union leaders said they were told that negotiations with GM had hit a "hangup" and that they were instructed to be on alert for a possible strike.

"They just said we need to be ready," said Eldon Renaud, president of Local 2164 in Bowling Green, Ky., where GM's Chevrolet Corvette is made.

Local officials have delegated strike captains and let people know when they might have to walk the picket line, Renaud said. On Thursday afternoon, workers from the local were making stakes for picket signs, and at 4 a.m. yesterday, a union official returned to Kentucky from a trip to Indianapolis, where he picked up the signs.

Renaud said UAW members in Bowling Green would walk the line in four-hour intervals starting at midnight if they get a go-ahead phone call from national union leaders in Detroit. Union members would have to participate in order to qualify for $200 per week in strike benefits. The picket is set to take place at the property line of the Bowling Green plant.

Calls for union preparation for a strike are typical toward the end of contract negotiations. Harley Shaiken, a labor professor at the University of California at Berkeley, said the call represented not only the union's desire to win a good contract but also a dramatic reference point for the union.

"From the union point of view, it's an important symbol," Shaiken said. "It's saying, 'We've walked this picket line many times.' This ties the current negotiations into the last 70 years of what the union has done."

Renaud said he wasn't told what issues were causing the greatest concern. Sources close to the talks have said UAW President Ronald A. Gettelfinger has opened up to the possibility of the union taking on the payments for retirees' health plans, which the automakers now handle. Collectively, the Big Three automakers have more than $90 billion in unfunded obligations for retiree health care, covering about 1.5 million working and retired employees.

Analysts yesterday suggested that working out the details of a tax-exempt trust known as a voluntary employees' benefits association, or VEBA, was causing problems, though others close to the situation said talks were continuing smoothly.

"The VEBA has been viewed as crossing the Rubicon," Shaiken said. "But there's another river on the other side of the Rubicon. That's called the details."

He said the level and the character of the funding remain sticking points for the union. "Are we talking 80 cents on the dollar or 60? Are we talking cash or GM stock? It makes a difference."

The last major auto industry strike was in 1998, when the UAW shut down GM's North American production for 53 days. It cost GM billions of dollars in profits, as well as U.S. market share that it has never won back.

Analysts have said that a prolonged strike this year is highly unlikely because it represented what one called "mutually assured destruction."

GM, like the other Detroit automakers, is undergoing a major overhaul of North American operations. In 2005, GM worked out an agreement with the union to reduce retiree health care liabilities by about 25 percent, yielding yearly savings of about $1 billion. The union also agreed to a buyout program that reduced the number of GM's U.S. hourly employees by 34,000. GM is closing 12 manufacturing facilities by 2008 and sold major assets as part of the overhaul.

GM officials say they still need deep cuts to health-care costs to stay competitive with foreign automakers building cars and trucks in the United States. GM has about 432,000 retirees, compared with the 1,200 for the foreign companies in the United States.

The UAW, for its part, has been losing members for years, and any appearance of the UAW as a belligerent union could scare workers in foreign-owned auto plants that the union is trying to organize.

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