Labor Talks With GM Are Recessed Without Pact

By Micheline Maynard
The New York Times

Tuesday 18 September 2007

Detroit - Negotiations between General Motors and the United Automobile Workers stalled Monday night, as bargainers again went home without reaching a tentative agreement on a new contract to replace the pact that expired early Saturday.

The two sides recessed around 9 p.m. Eastern time, a G.M. spokeswoman said, after a relatively short 10-hour session. Talks were expected to resume Tuesday.

The U.A.W.'s contract with G.M has been extended hourby hour. Contracts at Ford Motor and Chrysler have been extended indefinitely. The stop-and-start nature of the discussions suggested the two sides were still far apart on a deal that would cover G.M.'s 73,000 workers in the United States.

At this stage in past contract talks, bargainers in Detroit have worked around the clock, often for 36 hours or more without a break, using the momentum of their discussions as a force to carry them to a conclusion.

This year, however, negotiators have taken breathers after each of the four sessions held since G.M. was selected as the union's strike target on Thursday evening.

G.M. plants reopened as scheduled on Monday, and a number of local unions told their workers to hold off on strike preparations until there was word from Detroit about the outcome of the talks.

Late Sunday, it appeared that negotiations were in danger of collapse, with union leaders considering the possibility of a strike or else recessing the negotiations and choosing another automaker, perhaps Ford, in an effort to reach a new contract.

But after resuming the discussions on Monday morning, the two sides were believed to be making some progress, people with knowledge of the discussions said. G.M. shares were up 86 cents, to $35.08, in late afternoon trading.

The tone and direction of bargaining have changed quickly on several occasions over the last few days, given the complex nature of the negotiations.

The union's decision not to extend the G.M. contract indefinitely gives it the ability to call a strike on short notice, its ultimate weapon in bargaining.

The primary issue is the creation of a health care trust that would assume responsibility for $55 billion in benefits for employees, retirees and their families.

The major sticking point appeared to be the way the trust would be financed. Normally such a trust, called a voluntary employee benefit association, or VEBA, is financed with a combination of cash, stock and possibly real estate.

The union's president, Ron Gettelfinger, was reportedly pushing for G.M. to put more cash in the health care trust, while G.M. officials were arguing in favor of a mix that contained more stock.

The level of financing has also been a subject of constant debate.

Companies are not required by law to provide the entire amount, since some covers expenses that have not yet been incurred. Generally, such trusts are financed at 50 to 70 percent.

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Nick Bunkley and Mary M. Chapman contributed reporting.

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