UAW May Be Buckling Down Sooner than Later for Talks with GM

Washington DC August 22, 2005; The AIADA newsletter reported that the time may have arrived for the United Auto Workers union to work with General Motors on a plan to help decrease the automaker’s burgeoning health care costs, UAW Vice President Richard Shoemaker told local union leaders Monday, reports The Detroit News.

According to union officials who attended the meeting, Shoemaker said “the union wants to help GM become more competitive, but will only consider moves that do not require it to reopen its contract with the automaker.” The union is set to renegotiate its contract with GM in 2007. During the meeting, which including top UAW officials and union leaders from GM and Delphi Corp. plants, "[Shoemaker] said (GM is) not going to be in any better shape in 2007 than they are today," according to James D. Kaster, president of UAW Local 1714.

According to the News report, “Shoemaker’s "down-from-the-podium" presentation Monday was described as an earnest "fireside chat" focusing on GM’s deteriorating financial condition. He plans to meet with Delphi union officials today.” Delphi’s Chairman and CEO Steve Miller was quoted earlier this month as saying, "We can no longer afford to continue to pay all-in wage and benefit costs of approximately $130,000 per year per U.S. hourly worker.” Analysts from the auto industry seem to support the idea that the union may fare better by coming to an agreement sooner rather than later.

"They need to make a deal. Their situation is not improving," University of Michigan’s Walter McManus said of the UAW’s situation with GM. “The UAW is likely to fare better by reaching a deal now rather than later, given the difficult road GM faces in turning its North American operations in coming years,” McManus said. Trying to get a handle on the depth of GM’s problems, the UAW a few months ago began conducting its own review of GM’s finances and hired financial experts Lazard Ltd. to study the automaker.