General Motors and the United Auto Workers have reached an agreement ending a two-day strike by the UAW.
The United Auto Workers have come to a tentative agreement with General Motors, bringing the 73,000 striking union members back to work. The two-day nationwide strike came to a conclusion just after 3 a.m. Detroit time, averting a potential disaster that could have collapsed the car company and sent the United States into a recession.
Any contract agreed to by the two will have to be reviewed by the presidents of UAW local chapters before being passed along to the GM union workers. Those workers will then need to vote to approve the deal.
The agreement gives GM one of their highest priorities - making health insurance for retirees the union's burden, not GM. Currently, GM handles health benefits for over 340,000 UAW retirees and spouses. GM will pay 70 per-cent of a $51 billion health care obligation to a UAW trust fund, giving the union nearly $36 billion to invest. In exchange, current workers will receive bonuses and lump-sums of cash from the car company.
UAW's top priority was to get GM to guarantee more job security for the laborers. It is unclear if the union got what they wished for.
Although a two-month long strike could have cost GM $15 billion in losses, GM was capable of weathering the storm caused by a short strike.
This deal is expected to set a precedent for UAW contract negotiations with Ford and Chrysler. Negotiations with each manufacturer are expected to begin within the next few monts.
For two days 80 GM plants across the United States were idled from the labor walkout. Car assembly lines and a transmission plant in Canada were forced to close down due to the American walkout. Parts shortages also led to a slow down at the Moraine, Ohio SUV plant owned by GM, but staffed by a different union's workers. Delphi Corporation, the principal GM supplier, enacted a temporary layoff of their employees. Those employees will likely return to work soon.
UAW President Ron Gettelfinger told members of the media that he believes the contract will be ratified. At a press conference this morning he said voting will likely start over the following week.