GM, UAW in last ditch effort to salvage deal

Our Corporate Bureau
24 September 2007

Mumbai: General Motors Corp and the United Auto Workers Union are rushing to close a deal aimed at cutting costs, and allowing the top US automaker to save $50 billion in post-retirement health-care.

Health care liabilities add more than $1,000 to the cost of each vehicle made by General Motors. Detroit automakers want to trim these expenses to compete better with foreign rivals, but workers are reluctant to give up benefits as their medical costs skyrocket.

The UAW had set a strike deadline for 11 a.m. New York time on the 10th day since its current contract with the largest US automaker was originally due to expire.

"General Motors has failed to recognise and appreciate what our membership has contributed during the past four years,'' UAW president Ron Gettelfinger said in a statement. "In this current round of bargaining, we did everything possible to negotiate a new contract," he added.

Despite the threat of a work stoppage, and GM Chief Executive Rick Wagoner's push for a reduction in jobs and health-care costs, the UAW hasn't walked out of the talks. Neither has the UAW walked out of a GM plant since 1998.

Although negotiators, meeting for the 20th consecutive day in Detroit, stepped up the pace in a bid to complete a tentative contract, the talks remained fluid and negotiations seemed to spill into another week, sources familiar with the talks said.