UAW Talks Extended; GM Target for Strike

DETROIT _ The UAW has selected General Motors Corp. to be the lead negotiating partner, also known as a strike target, in the year’s 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. Thursday.

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.

UAW communications to local leaders earlier Thursday said things were not progressing as well as expected. But people with knowledge of the talks said there had been signs of progress.

The UAW’s contract with GM expires at 11:59 p.m. Friday.

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

Some had wondered whether the UAW might pick Ford because of the automaker’s financial weakness _ the argument being that Chrysler and GM surely could handle anything Ford agreed to.

Meyers said he never bought into that thinking. “Everybody wants to be No. 1. Everybody wants to be the lead company. Everybody wants to get the contract that favors them and doesn’t favor their competition,” he said.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich., said the union was worried that negotiating with Ford first would complicate negotiations with Chrysler and GM.

With a contract agreed to at GM, Cole said the UAW could then negotiate something to help Ford.

But special exemptions for Ford are hardly guaranteed.

Harley Shaiken, labor expert at the University of California at Berkeley, said the UAW likely believes 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.”

By contrast, he added, “Ford is weaker financially … and Chrysler is simply uncertain with the new ownership.”

While little progress may have been evident in the main negotiations, people familiar with them said that the union was privately working toward the VEBA.

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

Cole said he’s heard from several UAW members who believe an independent expert must manage a VEBA on a day-to-day basis.

“The UAW is a pretty clean union, but that is such a huge amount of money that it is best to be handled by a total independent source _ and it will be,” Cole said.

He said he expects that the UAW would likely have “some sort of interface,” such as a board of directors, to oversee the fund.

The UAW did not describe any specific issues, such as pay, pension, health care or work rules, in communications to members.

“We are continuing to meet with the corporation and expect to put in long hours between now and the deadline,” Rapson said in his Thursday afternoon e-mail. “There is still much to be done.”

At noon Thursday, GM international servicing representatives notified local leaders that things were not “progressing as well as expected at the national negotiations and that the shop committee needs to be present at the union hall,” at 10 p.m. Friday to hear whether the parties would extend contract talks or call for a strike, according to a posting at a UAW local.

Local leaders at all three automakers told the Detroit Free Press that they have already created strike assignments and picket signs, though most believe a strike is unlikely. Still, they said, the union needs to demonstrate that it could strike to leverage any power it has in negotiating for the best possible contract.

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

Tony Stiel, a 48-year-old worker at GM’s Pontiac Metal Fabricating plant, said he was hopeful the UAW could reach a deal with GM without interrupting work. Both sides would be better off avoiding a strike, he said.

“I’m optimistic that they’re going to settle it,” Stiel said.

___

Detroit Free Press staff writers Sarah A. Webster and Jewel Gopwani contributed to this report.

___

(c) 2007, Detroit Free Press.

Visit the Freep, the World Wide Web site of the Detroit Free Press, at http://www.freep.com.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.