Auto workers and General Motors resumed talks Saturday, but gave no sign of nearing agreement on a new union contract covering the company's 80,000 hourly workers.
Anxiety surrounding the talks — held in secret by mutual agreement — rose by the hour as the union's old contract expired, and the United Auto Workers (UAW) leadership held off calling a strike.
This year, the UAW has chosen to first pressure GM into a settlement, and then pressure Ford and Chrysler to accept similar deals.
However, the negotiations have reopened old class divisions lying at the heart of the labor conflict that has festered for decades inside the US auto industry, observers said.
The chief stumbling block in the talks was the shape of the trust or voluntary employee benefit association — known as a VEBA –that would assume responsibility for the health care benefits of more than 460,000 GM retirees.
The issue is vital to both sides, observers said. “We sat down with (GM executives) several months ago and they told us the top issues were health care, health care and health care. Nothing else came close,” said David Cole, director of the Center for Automotive Research.
Harley Shaiken, a labor expert from the University of California at Berkeley, said that while the union has accepted the idea of a health-care trust the details of its operation are critical.
“These are not minor details,” he said. “It's like buying a house: If you can't agree on all the other terms like … who pays for the new roof, you don't have a deal.”
Union bargainers have reservations about funding the trust with blocks of company stock. “The idea of building the trust company stock in the post-Enron world just isn't workable from the union point of view,” he said.
Cole, however, said using company stock to finance the health-care trust could actually work to the union's benefit and would help ease the financial burdens on Detroit's three automakers, which have lost 25 billion dollars since the start of 2005.
“It would be transparent. You wouldn't have any of the chicanery that characterized Enron,” Cole said.
Jerry Tucker, founder of the Center For Labor Renewal, a dissident labor group, in Saint Louis, Missouri, said union members have little confidence in the industry's executives or their management skills.
“Toyota hasn't become the dominant automaker because they pay less than the American carmakers. They're winning because they're building vehicles people want to buy,” he said.
Tucker said a bankruptcy at GM parts supplier Delphi, while nominally resolved, has also colored the talks. Delphi filed for bankruptcy in 2005 in an effort to break its labor contracts, and the union finally signed off on a new work agreement months ago that imposed deep wage cuts.
“If the Big Three automakers are ever going to be competitive in the global marketplace, it isn't going to be the workers that are going to have to have their wages and benefits reduced,” said Allen Nielsen, an UAW member from Norwalk, Ohio in a letter this week to UAW president Ron Gettelfinger. A copy of the letter was given to AFP.
“Management also are going to have to have their wages, benefits and numbers reduced to the same corresponding levels as the foreign competition,” Nielsen said.
The trend in recent months, however, is for US automakers to increase the pay and bonuses of key executives. Two recent high profile executive hires include Jim Press and Robert Nardelli at Chrysler, and Allen Mulally at Ford.
Shaiken says union members are aware of the trend and its impact on executive pay.
“There has always been a element (of class warfare) in these discussions,” he said.
