General Motors Corp. and the United Auto Workers dug in at the bargaining table Tuesday to craft a deal that slashes labor costs while safeguarding union jobs as thousands of autoworkers spent a second day on the picket line.
They NEEDED to get that 50 Billion off their books. I'm glad the union finally decided to discuss it and come to an agreement to start a trust for retirees. When they went on strike, they refused to even discuss that little bargaining chip (UAW refused).
GM, which has a $51 billion tab from retiree health-care expenses, will pass the buck to the UAW after contributing 70 cents on the dollar to an independent trust designed to cover health-care costs. The UAW will then take over responsibility for the trust, called a Volunteer Employees Beneficiary Association, or VEBA.
It will help out in the long run tremendously, but current wages and benefits are still higher than the foreign guys. The two tier wage scale is a start. GM will still eventually have to shut down plants or get the UAW to agree to restructuring the pay scale.
Many companies have done this. Cummins does this locally. The 'Old Timers' still make off pretty well, but the new employees get substantially lower pay. The benefit of this was Cummins stayed in business and the workers got to keep their jobs.
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