GM called UAW's likely top target

Contracts expire at midnight today

September 14, 2007|By Detroit Free Press

DETROIT -- The United Auto Workers has selected General Motors Corp. to be the lead negotiating partner, also known as a strike target, in the national contract talks, leading workers, analysts and labor experts to believe the union has agreed - in principle - to establish the retiree health care trust that the nation's largest automaker so desperately wants.

The union has agreed to indefinite contract extensions with Ford Motor Co. and Chrysler LLC, those companies acknowledged.

Either side can break off the extension with three days' notice, people familiar with the matter said.

"The UAW International Executive Board has decided that General Motors Corp. will be the strike target for this round of national automotive contract negotiations," Cal Rapson, UAW vice president, told local leaders by e-mail at 4 p.m. yesterday.

Labor experts and automotive industry analysts say the announcement is great news for GM and could mean the parties are willing to negotiate the retiree health care trust - known as a Voluntary Employee Beneficiary Association, or VEBA. GM has been pushing to move its retiree health care obligation off its books and into a trust run by the UAW.

"I am sure GM is overjoyed," said Gerald Meyers, a University of Michigan business professor and former chief executive officer of American Motors.

The UAW's contract with GM expires at 11:59 p.m. today.

Meyers praised the development, saying it is a good sign.

"It means the UAW is playing it straight," Meyers said. "They're going right into the teeth of the tiger. They're going to try to work something out with people who very much want to work something out."

Canadian Auto Workers President Buzz Hargrove, who has negotiated several contracts, said it could be a sign that the union is willing to negotiate a VEBA.

"If they've decided to agree to a VEBA, ... it makes sense for GM to be the target," he said.

In years that the union has identified a target, the UAW traditionally has chosen the healthiest automaker.

Harley Shaiken, labor expert at the University of California, Berkeley, said the UAW likely believes that it can craft the best deal with GM that can then be applied to Chrysler and Ford.

"GM is the furthest along on the road to recovery," Shaiken said, "and GM has pushed hard on the issue of the VEBA - which offers some possibilities for the union - and has the greatest need for the VEBA, given that it has four retirees for every active worker."

While little progress may have been evident in the main negotiations, people familiar with the talks said that the union was privately working toward the health care trust.

The UAW has been discussing who on its staff would have a role in the administration of a multibillion-dollar trust should the union and Detroit automakers agree to one as part of a new national contract, the people said.

Local leaders at all three automakers told the Detroit Free Press that they have created strike assignments and picket signs, though most believe a strike is unlikely.

Gary Chaison, a professor of management at Clark University in Worcester, Mass., said he thinks there is little chance of a strike.

"It would be mutually assured destruction," he said. "A strike would be attacking a crippled company," leaving it unable to offer anything lucrative.

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