World's largest carmaker reaches accord with labour union
Friday, 28 September 2007
John Reed
THE United Auto Workers (UAW) union last Wednesday called off a nationwide strike at General Motors (GM) after the two sides agreed on a new four-year labour contract at the world's largest carmaker.
In a sign of a key breakthrough on reducing the high costs crippling GM's competitiveness, the company said the agreement included a memorandum of understanding to establish an independent retiree healthcare trust.
"This agreement helps us to close the fundamental competitive gaps that exist in our business," Rick Wagoner, GM chairman and chief executive, said in a statement. "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."
Further details of the agreement were not immediately available. It is still subject to ratification by the UAW's members, and the agreement on healthcare is subject to approval by the courts and satisfactory review of accounting treatment with the Securities and Exchange Commission.
Earlier, UAW President Ron Gettelfinger told a news conference that production at GM plants would resume and ratification of the agreement would begin this week. "We feel very confident it will be ratified," news agency, Reuters, quoted Mr Gettelfinger saying.
The agreement covers about 74,000 UAW-represented employees at the carmaker, and now is expected to be applied to similar agreements at Ford Motor and Chrysler, the company's big Detroit rivals.
"There's no question this was one of the most complex and difficult bargaining sessions in the history of the GM/UAW relationship," said Mr Wagoner, who thanked Mr Gettelfinger and his team for "their leadership and hard work in negotiating the agreement."
Last Monday the union had called the first nationwide strike against GM since 1970, involving about 73,000 workers at the carmaker's US operations. The carmaker sells more than half of its vehicles outside North America, and its international operations had been unaffected by the strike.
The talks, originally scheduled to conclude on September 14 but later extended, were reported to have broke down over the UAW's request for job security guarantees from GM in exchange for agreeing other changes aimed at improving GM's competitiveness.
Employee-related costs put GM, Ford and Chrysler, all of which are losing money, at a disadvantage to their foreign rivals.
Expectations of a breakthrough deal in the talks has lifted GM's and Ford's share price in recent months. Chrysler is majority owned by private equity group Cerberus Capital Management.
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FT Syndication Service
THE United Auto Workers (UAW) union last Wednesday called off a nationwide strike at General Motors (GM) after the two sides agreed on a new four-year labour contract at the world's largest carmaker.
In a sign of a key breakthrough on reducing the high costs crippling GM's competitiveness, the company said the agreement included a memorandum of understanding to establish an independent retiree healthcare trust.
"This agreement helps us to close the fundamental competitive gaps that exist in our business," Rick Wagoner, GM chairman and chief executive, said in a statement. "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."
Further details of the agreement were not immediately available. It is still subject to ratification by the UAW's members, and the agreement on healthcare is subject to approval by the courts and satisfactory review of accounting treatment with the Securities and Exchange Commission.
Earlier, UAW President Ron Gettelfinger told a news conference that production at GM plants would resume and ratification of the agreement would begin this week. "We feel very confident it will be ratified," news agency, Reuters, quoted Mr Gettelfinger saying.
The agreement covers about 74,000 UAW-represented employees at the carmaker, and now is expected to be applied to similar agreements at Ford Motor and Chrysler, the company's big Detroit rivals.
"There's no question this was one of the most complex and difficult bargaining sessions in the history of the GM/UAW relationship," said Mr Wagoner, who thanked Mr Gettelfinger and his team for "their leadership and hard work in negotiating the agreement."
Last Monday the union had called the first nationwide strike against GM since 1970, involving about 73,000 workers at the carmaker's US operations. The carmaker sells more than half of its vehicles outside North America, and its international operations had been unaffected by the strike.
The talks, originally scheduled to conclude on September 14 but later extended, were reported to have broke down over the UAW's request for job security guarantees from GM in exchange for agreeing other changes aimed at improving GM's competitiveness.
Employee-related costs put GM, Ford and Chrysler, all of which are losing money, at a disadvantage to their foreign rivals.
Expectations of a breakthrough deal in the talks has lifted GM's and Ford's share price in recent months. Chrysler is majority owned by private equity group Cerberus Capital Management.
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FT Syndication Service