By Micheline Maynard New York Times Published: September 16, 2007
Detroit - Talks between the United Automobile Workers and General Motors appeared close to an impasse Sunday night, nearly two days after contracts covering 73,000 hourly workers expired.
The dispute came even though the two sides had essentially agreed on the creation of a health care trust that would take responsibility for benefits paid to active and retired workers and their families, people with knowledge of the negotiations said.
They insisted on anonymity because they were not authorized to speak publicly about the private negotiations.
The two sides were mainly deadlocked over guarantees sought by the union's president, Ron Gettelfinger, for workers who will remain at G.M. once it completes an extensive restructuring next year, these people said.
"The talks are going bad," said one person who had been briefed on the talks.
Of course, the tenor of negotiations can change rapidly. But if the union decided not to continue discussions with G.M., it would recess the talks there and most likely approach the Ford Motor Company in hopes of reaching an agreement, this person said.
The apparent impasse contrasted sharply with the situation earlier in the day, when the leaders of some local unions around the country told their members that the two sides were close to reaching a tentative agreement. These officials had said a deal could be announced by the end of the day, and several said Sunday night that they still hoped that would be the case.
A spokeswoman for General Motors, Katie McBride, declined to comment. A spokesman for the U.A.W. could not be reached.
The U.A.W. named G.M. as its strike target on Thursday in the talks on a new contract to replace the one that expired at 12:01 a.m. Eastern time on Saturday.
Contracts at Ford and Chrysler LLC were extended, while the union agreed to keep the G.M. contract in place on hour to hour. That would allow it to call a strike at any time.
However, a walkout at G.M. did not seem likely. A number of local unions posted notices on their Web sites, asking workers to report for duty Monday as planned.
Instead, the union may try its chances at Ford, as it did during negotiations in 1982. At the time, the union was angered by contract terms proposed by G.M., which like Ford was suffering from an economic downturn.
The union's then-president, Douglas A. Fraser, recessed the negotiations at G.M. and reached a historic agreement at Ford that traded concessions for involvement in company decisions. It later reached a similar deal at G.M.
Negotiations with Ford would be a homecoming for Mr. Gettelfinger, who began his career in 1964 at Ford's plant in Louisville, Ky. He headed the union's Ford division before becoming U.A.W president in 2002, and has good relations with its labor officials.
Ford is in worse financial shape than G.M., however. It lost $12.6 billion in 2006, and continues to lose money in North America, where it does not expect to be profitable until 2009. And its chief executive, Alan R. Mulally, is said to want to reach an agreement that would give Ford more flexibility than the current U.A.W. contract, which is the size of the Manhattan phone book.
The G.M. talks appeared in danger of breaking down over several matters. One is said to involve Mr. Gettelfiger's demand that G.M. stop sending work outside the United States. Mr. Gettelfinger also was pushing for G.M. to put more cash in the health care trust, called a voluntary employee benefit association, or VEBA.
The trust, to be run by the union, would assume a liability that G.M. estimates at $55 billion. G.M., Ford and Chrysler have pushed hard in contract negotiations for the union to take charge of its medical benefits, saying they are a major factor limiting their ability to compete with Japanese auto companies.
All told, the three companies have health care liabilities totaling nearly $100 billion.
VEBAs, which reduce a company's debt, are an increasingly common choice by unions at troubled companies like Bethlehem Steel and Goodyear Tire and Rubber, which established a trust with the United Steelworkers union last year.
Nick Bunkley and Mary M. Chapman contributed reporting.
http://www.nytimes.com/2007/09/16/business/17cnd-gmc.html?_r=1&hp&oref=slogi n
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