Vol. 71/No. 37      October 8, 2007

Some 73,000 members of the United Automobile Workers (UAW) walked out September 24, shutting down production at 82 GM plants in 30 states.

Under the new agreement, GM will no longer bear responsibility for health benefits for union members, retirees, and their families. They will now be covered through a union-administered trust fund. “The trust is expected to remove more than $50 billion in long-term obligations from GM’s books,” the Detroit Free Press reported.

According to the Free Press, the pact includes no wage increases and establishes two wage tiers. New hires and workers in “non-core” jobs will be paid at a lower rate.

Bloomberg news service said the new pact may “transform the competitive landscape for the U.S. auto industry,” making its costs closer to those of its Japanese rivals. It will be the model for upcoming contracts with Ford and Chrysler.

UAW president Ron Gettelfinger said the new pact includes promises of job security for GM workers in the United States. The majority of GM’s profits now come from its non-U.S. operations.

“Since 2003, our members have made extraordinary efforts every time the company came to us with a problem: the corporate restructuring, the attrition plan, the Delphi bankruptcy, the 2005 health care agreement,” said Gettelfinger in a statement announcing the strike.

The union negotiated “landmark” health-care concessions with GM and Ford in 2005; this was followed by an attrition plan with the Big Three that allowed cutting more than 75,000 jobs. In June the union ratified a four-year contract with Delphi Corp., GM’s largest parts supplier, that included cuts in wages, plant closings, and elimination of the union’s jobs bank.

GM’s workforce is less than a quarter of its 1990 level.  
 
 
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