United Auto Workers Tells Its Local Leaders to Get Ready to Strike GM

By Sharon Silke Carty

DETROIT — The United Auto Workers has told local union leaders at General Motors sites to be prepared to strike if a contract isn’t reached by 11:59 p.m. today.

Local union leaders will be told at 10 p.m. whether the union plans to ask workers to walk out when the contract expires at the end of the day. Ford Motor and Chrysler have agreed to extend contracts with the UAW indefinitely.

The locals were notified by faxed letters written by UAW Vice President Cal Rapson, who is leading negotiations with GM. Rapson told leaders the union is continuing discussions with GM, but noted, “These are difficult issues to tackle.”

“GM and the UAW have agreed to keep bargaining at the table, so it would be inappropriate for me to comment on the ongoing discussions,” said Dan Flores, a spokesman for GM.

Dave Green, president of Local 1714 in Lordstown, Ohio, says he spent Thursday printing up signs and talking to members about the possibility of a strike. More than 90% of his union members voted in favor of a strike recently.

“I have a lot of faith in Cal Rapson and his team,” Green said. “I feel very confident in their ability to do the right thing. If they feel the right thing to do is to put our tools down and walk out, then I trust him.”

The biggest issue in this year’s negotiations is retiree health care. The automakers would like the union to take control of retiree health care through a fund called a Voluntary Employee Beneficiary Association, or VEBA. It would be funded by the automakers and controlled by a board of directors. The fund would be invested by the directors and would grow or shrink depending on the success of those investments and how much would be paid out. Similar funds set up at Caterpillar and Detroit Diesel ran out of money.

A VEBA would take health care obligations off the automakers’ books, but could be a huge cash drain when initially funded. The biggest sticking point is how much money would go into the fund. The automakers would like to put in 60% to 70% of projected costs, arguing that, if invested well, the pool would grow to cover costs.

Talks over a VEBA failed in the past because the UAW wanted it to be funded at 110% of future costs. (c) Copyright 2005 USA TODAY, a division of Gannett Co. Inc.