Details of the deal

Details of the hard fought deal are starting to leak out. First, the NYT's story this morning:

The contract’s main feature — a health care trust called a voluntary employee benefit association, or VEBA — means that G.M. will no longer have to carry the debt it will owe for employee and retiree health care benefits on its books. Earlier this year, G.M.’s chief executive, Rick Wagoner, referred to those obligations as “very large and frankly formidable.”

That debt is estimated at $55 billion for the next 80 years. So G.M. will establish the trust with about 70 percent of that amount, making an upfront payment of cash, stock and other assets. The difference is expected to come from gains on investments by the trust.

In return, the union won guarantees that medical benefits for hourly workers and retirees and their families will remain in place for the next two years. G.M. will also invest money in its American plants, and will maintain its current union work force of 73,000, according to Ron Gettelfinger, the U.A.W. president.

And the Free Press has these details:

• Workers will receive no wage increases, but will each receive a $3,000 signing bonus, plus annual lump-sum bonuses of 3% or 4% for the final three years of the contract. The UAW also agreed to divert a portion of future wage increases to pay for health care for both active and retired workers, those sources said.

• GM will make more than 4,000 temporary workers permanent employees, a move that stands to increase UAW membership.

• The automaker will implement a two-tier wage and benefits scale for jobs that GM and the UAW have agreed are "non-core" production jobs. Those jobs are expected to include many positions in which workers do not have their hands on a vehicle in the assembly process. In addition, GM is expected to offer a targeted special attrition program to move workers in those non-core jobs off the active worker member rolls. Wages and benefits for second-tier workers will average $27 per hour, compared with the average $73 per hour of current workers, the sources said.

• Gettelfinger said the agreement includes modifications to the controversial jobs bank, which provides unemployed workers with full pay as they wait for job openings. The modification includes an expansion of the area in which workers would be required to move for a different assignment or lose their income. Currently, workers are not required to move for jobs farther than 50 miles from their previous plants.

There is mixed emotions about the deal, especially that two-tier structure. It's something a lot of people weren't talking about as negotiations got more and more intense, but now that it's become a reality, it's kind of splash of cold water.

"I hate it," Jason Craig, a 34-year-old Chrysler worker, bluntly said Wednesday after hearing about the UAW deal with GM.

Craig works at a Chrysler parts warehouse in Center Line. For two nights he had stopped and walked the picket line with GM strikers at a powertrain plant in Warren.

"These guys that walked off that line at 11 o'clock" Monday morning, Craig said, "I tip my hat to them."

At least one part of the deal has him upset. He fears the two-tier wage system in the tentative deal with GM could be carried over to Chrysler and affect his job. Hourly employees not directly related to making cars and trucks could receive lower pay and benefits under the contract.

Even if his job is not directly affected, Craig, a New Baltimore resident, said he would not approve a contract that creates two tiers of wages and benefits.

He backs his union and Gettelfinger, but this part of the deal undermines the union, he said.

"There's no solidarity in that," Craig said about the two-tier system. "If we have another strike and we have one guy making $15 an hour and another guy making $30 an hour, I guarantee you he's not going to walk out as fast as me."

But I think this quote encompasses what the union was fighting for:

Faust's father moved from Tennessee to Michigan in the late 1940s to work in a Chrysler Corp. foundry. The new contract gives the next generation a chance to keep things going, he said.

"We fight not just for ourselves, but we fight for the young people coming behind us," Faust said. "This is middle-class employment, and we want to keep it that way."

"They may have underestimated the union's resolve"

Despite all the outsourcing and early buyouts that thinned active ranks, GM should have known what it was dealing with:

General Motors Corp. and the United Auto Workers are close to an agreement on a new contract that would end a two-day strike by 73,000 workers at the biggest U.S. automaker, five people briefed on the talks said... An accord to halt GM's first national strike in 37 years may be announced as early as today...

The framework for an agreement for the UAW to assume an estimated $50 billion in future union retiree medical costs in exchange for a one-time payment from GM had already been mostly complete, according to the people. Bargainers spent the last two days on issues such as health care for active workers and reduced pension and retiree benefits for new hires, the people said.

"GM may have realized that the strike could go on for a while, that they underestimated the union's resolve,'' said Harley Shaiken, a labor professor at the University of California at Berkeley. "The key is that GM must have a commitment on future products and jobs,'' he said. "That's the linchpin that converts whatever sacrifices are made into future benefits for UAW workers.''

Gettelfinger and Co. didn't let management play chicken with them. They were practically dared to strike, and they did. And GM, either fearing the repercussions of a strike already being supported by the Canadian UAW and the Teamsters, among others, going a long time, or perhaps knowing they were asking for the sun and the moon, is looking ready to concede what they were seemingly unwilling to just a few days ago.

Or maybe they were afraid of this:

EDWARDS TO JOIN STRIKING AUTO WORKERS ON PICKET LINE IN BUFFALO

Buffalo, New York – Tomorrow, Senator John Edwards will join striking auto workers from U.A.W. Local 774 on a picket line outside of the General Motors Powertrain Plant in Buffalo, New York. On Monday, 73,000 U.A.W. members walked off the job after contract negotiations with General Motors reached a stalemate.

It's amazing what standing up to these people can do.

Solidarity

While it may affect their workload, and consequently, their wages, its good to see that there will be no ancillary picket crossing from the Teamsters:

The International Brotherhood of Teamsters will not deliver General Motors Corp. (GM) cars while the United Auto Workers stages a nationwide strike against the U.S. auto maker.

In a press release issued following the UAW's decision to kick off a strike Monday, the Teamsters said it will "stand with" the UAW by not crossing "a UAW picket line...Our 10,000 automotive transport members will not deliver GM cars" from plants to dealerships in the U.S.

Teamsters spokeswoman Leslie Miller said the Teamsters handles delivery of GM cars from plants to dealers. She said the auto maker may try to get help from non-Teamsters-represented delivery services but it may find trouble finding nonunion people with needed capabilities.

"Workers should not solely bear the brunt of decades of bad business decisions by GM management," Teamsters President James P. Hoffa said. "By outsourcing good jobs and creating a growing environment of economic and job insecurity, GM has failed its workers and its customers."

This is especially significant, given that the Teamsters are part of the Change to Win federation that broke off from the AFL-CIO two years ago. Not that I expected anything else, but it's good to know there will be no meaningful inaction.

Strike

It's come down to this:

United Auto Workers members walked out of General Motors Corp. plants shortly after 10 a.m. Monday as negotiations for a four-year contract reached an impasse 10 days after the previous contact expired.

The strike, the first against GM since 1998, came after the two sides appeared close Sunday night to historic changes in the contract concerning health care and other benefits. Few observers had expected a strike because it comes as Asian automakers are grabbing bigger shares of the U.S. market and could be damaging to both sides.

UAW President Ron Gettelfinger said the union walked out because GM "has failed to recognize and appreciate what our membership has contributed during the past four years."

The union and GM reportedly had agreed on a plan to transfer responsibility for GM's $51 billion health care liability for retirees to a union-run trust fund but were unable to settle on wages and job security issues.

Workers at GM's plant in Janesville, Wis., started picketing outside the massive facility shortly after 10 a.m., halting work on assembly lines that build large sport-utility vehicles such as the Chevrolet Tahoe and Suburban.

"If they think I'm going to take a wage cut and pay more for health care, they're dreaming," said Dave Van fossen, a 48-year-old worker at the plant. "My utilities just went up 14 percent and everything else is going up. Why would I accept a pay cut?"

The part of the article I didn't excerpt:

An extended strike could slow or derail a turnaround effort at GM that had produced three straight quarters of profit after two years of massive losses. GM has eliminated more than 150,000 UAW jobs the last two years and could cut more if it decides to close more U.S. plants.

No mention of the damage a strike would do to the union's members, and how they're soldiering on despite it, looking for fairness. Poor GM, not getting a solution to their mess on a silver platter.

T-Minus 10

D-Day, eleven hundred hours:

The UAW announced today that due to the failure of General Motors to address job security and other mandatory issues of bargaining, the union has set a firm strike deadline for 11 a.m. on Monday, Sept. 24.

“We’re shocked and disappointed that General Motors has failed to recognize and appreciate what our membership has contributed during the past four years,” said UAW President Ron Gettelfinger. “Since 2003 our members have made extraordinary efforts every time the company came to us with a problem: the corporate restructuring, the attrition plan, the Delphi bankruptcy, the 2005 health care agreement. In every case, our members went the extra mile to find reasonable solutions.

“Throughout this time period," said Gettelfinger, "it has been the dedication of UAW members that has helped GM set new standards for safety, quality and productivity in their manufacturing facilities. And in this current round of bargaining, we did everything possible to negotiate a new contract, including an unprecedented agreement to stay at the bargaining table nine days past the expiration of the previous agreement.”

“This is our reward: a complete failure by GM to address the reasonable needs and concerns of our members,” said UAW Vice President Cal Rapson, director of the union's GM Department. “Instead, in 2007 company executives continued to award themselves bonuses while demanding that our members accept a reduced standard of living.

“The company’s disregard for our members has forced our bargaining committee to take this course of action,” said Rapson. “Unless UAW members hear otherwise between now and the deadline, we will be on a national strike against GM at 11 a.m. EDT on Monday, Sept. 24th.”

The UAW negotiating team will remain at the bargaining table, Rapson said, throughout the night and up until the 11 a.m. deadline.

Despite every single media report stressing just how important it is that the big bad UAW needs to help poor GM out from underneath its crushing healthcare costs, its hard to argue with all the effort and help the union has given to the big dumb giant in recent years. Oh, not to mention that GM OWES the union members that healthcare. Let's not forget that as things begin to get really contentious.

End game?

Final lap?:

Negotiators for General Motors Corp. and the United Auto Workers were close to finalizing the details of a new contract Sunday after 20 straight days of talks, according to a local union official who is being briefed on the discussions.

The two sides have wrapped up work on most issues and were down to determining how much money GM must put into a trust fund for retiree health care that will be managed by the UAW, said the official, who spoke on the condition of anonymity because the talks are private. The official expected a final deal could be reached as early as Sunday evening, although others said it could take longer.

"My sense is they are close. I think this is the end game," said Harley Shaiken, a professor at the University of California at Berkeley who specializes in labor issues and has been closely following the talks. "They may be approaching a resolution, but if that's in the next two hours or the next two days, it's hard to say. There are a lot of complex issues yet to be resolved."

Of course, wasn't the amount of money going into the VEBA pretty much THE main issue in the first place? Maybe they're closer on a consensus number, or maybe the question is this:

Other key issues that remain to be clarified include how GM funds its VEBA contribution and whether the UAW deal allows the automaker to issue stock or tap its over-funded pension for some of the amount.

Earlier this year, the UAW agreed to a VEBA for bankrupt auto supplier Dana Corp funded at 71 percent of its liabilities, a level considered to be a benchmark in the GM talks.

Part of the funding for the VEBA could also come from cost-of-living increases that would otherwise have been paid to active workers. The UAW has allowed such transfers to pay for health care in contracts going back over 25 years.

The article also points out how much leverage it would give the UAW in the fight for the future of health insurance nation-wide. With over a million people in its risk pool, that's a significant chit to play in negotiations with big HMO's and the Republicans (and unfortunately, Democrats) they fund politically. Imagine those 1.2 million people in the VEBA buying into John Edwards' public run, Medicare-like plan.

That being said, the union has to make sure it gets enough money to fund the VEBA in the first place, as healthcare costs keep rising. From earlier reports, it didn't sound like GM was too excited about funding even that 71% that Goodyear, in much worse shape, put down.

And, they have to measure future production plant promises, as well. Those are the two most important things, clearly, and GM is playing them off each other. How the next President handles healthcare is a wild card, and one the UAW cannot play incorrectly. Do they take less VEBA funding anticipating some kind of universal healthcare? Remember, Edwards and Hillary (stealing from Edwards) will be requiring employers to pay for healthcare as a large part of the plan, so the VEBA exonerates GM, Chrysler and Ford from that requirement. Do they hope price controls send the price down enough, or that workers will qualify for a good chunk of assistance when it comes to the sliding premiums they will offer? I'd imagine that the public plan will be the one chosen by the UAW if the Edwards (and I guess Hillary) plan goes through.

So, how do you measure that against actually keeping jobs here? It'll be interesting to see what balance they strike.

Viva la VEBA no longer?

GM's inflexible greediness is shooting them in the foot:

General Motors Corp. and the United Auto Workers are discussing alternatives to a proposed union-run retiree health-care fund after the two sides couldn't agree on how much money GM would provide, three people with knowledge of the talks said.

"It's a terrific setback,'' said Sean McAlinden, an analyst with the Center for Automotive Research in Ann Arbor, Michigan. "Without the trust fund on retiree health, the first thing GM is going to offer is a massive, rapid offshoring of GM production and jobs.''

GM has asked the UAW to consider requiring new union members to replace the current pension with a 401(k) retirement savings plan and accept a fixed amount of health-care funds each year once they retire, people familiar with the proposal said earlier this week. GM also is asking all workers to accept a freeze in cost-of-living allowances and other concessions, people familiar with the talks said.

In return, the automaker has offered incentives such as a cap on out-of-pocket health-care expenses for retired and active workers and give lump-sum bonuses to employees for ratifying the contract, the people said.

And Forbes says:

Now under discussion is a second offer from GM that doesn't include the trust but has larger cost cuts, including a drop in hourly wages, increased health care contributions, fewer guarantees of new work at U.S. factories, reduced vacation time and other items.

But, not so fast, from the same Forbes article:

GM spokesman Tom Wickham would not comment on the VEBA developments. UAW spokesman Roger Kerson declined to comment.

On Thursday morning, a local union leader who also had been briefed on the talks said the VEBA was discussed by UAW bargainers on Wednesday.

"The VEBA's on the table. They're looking at the numbers right now," said the official, who also requested anonymity because the talks are private.

So, what it comes down to is a fight over how big the lump sum will be, as well as how GM will help out if healthcare costs keep rising like crazy. I guess saving 25% on healthcare costs and totally shifting responsibility to the union, which will have significant operating costs to run the VEBA, isn't enough. And now they're showing their true colors, looking to offshore jobs and cut other benefits.

What happened to negotiating in good faith? And now, if the UAW does go on strike, don't think the media won't portray it as them being hot headed and bringing potential ruin to the country. Bank on it.

Talking VEBA all night long

Slow but meaningful progress, with a breakfast break?

Bargainers for General Motors Corp. and the United Auto Workers took a break early Monday amid optimism that they are getting closer to reaching a critical contract agreement.

Negotiations came to an end just before 3 a.m. after a marathon 16-hour session on Sunday and Monday, said GM spokesman Tom Wickham.

''GM and the UAW have agreed to take a break, and talks will resume later this morning. We aren't going to comment or speculate on the nature or content of the discussions,'' Wickham said.

He said that all employees were expected to report for work at their scheduled times on Monday.

... One of the local union leaders who asked not to be identified said the main outstanding issues were retiree health care expenses and whether GM would promise to build new vehicles at UAW-represented factories. GM wants the union to take over responsibility for retiree health care costs using a company-funded trust. The UAW was asking for job guarantees in exchange for taking on the costs.

I love that every report says that one of the "last sticking points" is healthcare, especially retirees. Wasn't that THE major sticking point the entire time?

As expected, VEBA is the name of the game. Here's the Detroit Free Press's analysis of the situation:

How much money is involved?

Even the details involve billions. GM reports about $64 billion in health care obligations, more than $50 billion of which is believed to be future retiree health costs. The Detroit Three total is about $112 billion in long-term benefit obligations, of which maybe $100 billion relates to UAW retiree health care.

A key point is how much money GM and the others would contribute to the creation of a trust. People familiar with the talks say GM proposed paying no more than 65% of its estimated liability into a fund. Analysts say union leaders want more than 70%. Against a $50-billion liability, even a 5% gap is worth $2.5 billion.

What about the risks of managing all that money?

Other VEBAs, including one at Caterpillar in 2005, have run out of money before they had provided the benefits they were expected to cover.

Michael Shamhart, 49, an electrician at Lordstown Assembly in Ohio, said he believes active workers will have to give up future raises to support a VEBA, that retirees will have to pay a larger share of their health costs, or both.

Like many workers, he also expressed concern that a VEBA, no matter the level of initial funding, could eventually run out of money.

Would the UAW create a single, huge fund, or individual funds for each company?

People close to the talks say the discussion has been framed as if it would be one VEBA that all three U.S. automakers would pay into.

The UAW, perhaps through a board of directors, will need to hire its own staff to make sure the health funds are being properly managed and invested, people familiar with VEBAs and health-care administration said. Those people asked not to be named because they are not intimately involved in the union's decision making and did not want to risk the loss of contracts for speculating about such a structure.

The creation of three VEBAs would cost more, requiring the union to hire more people and add duplicate administrative tasks.

However, establishing two or three VEBAs might eliminate problems managing the benefits available to members, should economic arrangements with the automakers differ.

UAW has been working to secure VEBA funding increases if the cost of healthcare rises more than estimated, clearly something that has been going on for the last decade or so. For their part, GM is looking for a refund of sorts if a national universal healthcare plan is created. No indication of whether that refund would come with increases in other benefits or more hirings. Still, looks like this contract could be impacted in large part by the 2008 election.

As for union rank and file sentiment on the VEBA, maybe this letter in the New York Times this morning will give you some indication about members' feelings on the whole thing. It was written by Paul Schrade, Warren Davis, and Jerry Tucker, former UAW Regional Directors & International Executive Board Members:

Brothers & Sisters ,

We are writing to express our grave concerns over reports that consideration is being given by UAW negotiators in contract talks with GM, Ford, & Chrysler to a union-managed Voluntary Employee Beneficiary Association, or VEBA health care trust fund to cover hundreds of thousands of retired autoworkers.

Such a proposal, if ratified as part of a new collective agreement, would represent a radical shift in the traditions of our union. Knowingly placing members at risk under such a plan, whether active or retired, is contrary to the mandate of the UAW Constitution and its "Objects." It would undo decades of hard won healthcare benefit protections, paid for in large part by wage diversions, past concessions, and increased worker productivity...

It is also disturbing that a major change of this significance and impact has not been the subject of extensive discussion and debate within the union. The corporate proposed VEBA, which the union negotiators are said to be reviewing, is only now being revealed to the rank and file membership and much of the local union leadership by media reports, and sketchy ones at that. Yet the potential consequences of adopting such a plan will be economically painful, if not disastrous, to those covered by it. A number of factors could adversely affect its viability. Secrecy and uninformed members on this question can only further damage the shared principles we were founded to defend and advance as a union.

Previously negotiated health care protections, along with 30-and-Out Pensions, Supplemental Unemployment Benefits (SUB), Tuition Refunds, and many other benefits where the result of an extensive open internal debate within the union. In several instances, the debate went on for several years before UAW bargainers were authorized to negotiate them into the agreement between the parties.

The three signers of this letter represent six decades of critical experience and involvement within the UAW. We have been an active part of its ascendancy and, in recent years, sad witnesses to its decline. We do not minimize the assault UAW members and all U.S. workers have been under or the challenges our union has faced. But we do respectfully submit that the appropriate counter-proposal to the corporate bailout by way of a VEBA is a UAW demand that 2005's Attachment E "Health Care Reform Letter" be implemented and the corporations become a moving force on the public policy front for the enactment of the current universal, comprehensive, single-payer healthcare legislation contained in H...R. 676, introduced by Michigan Congressman John Conyers.

That such a national health care system would serve the auto companies self-interest and level the competitive playing field is well documented. The companies extol the economic value of the Canadian system. Our role as a union, in behalf of our members and the community at large, is not to help them escape their responsibility to their past commitments but to help them convert those commitments to the common good. On that proposal, our members are informed, and they will stand behind you.

Fraternally,

Former UAW Regional Directors:

Paul Schrade - Region 6

Warren Davis - Region 2

Jerry Tucker - Region 5

Again, it all comes down to politics. And like I said in my previous post, why any corporation that offers healthcare to its employees, especially companies that deal heavily with unions like the Big Three, is not fighting tooth and nail for national universal coverage, is beyond me. I guess it's just down to its basic anti-worker instinct, whether its in its self interest or not.

Still Pluggin Along

Late nights in Detroit:

After resuming contract talks mid-morning Saturday, General Motors Corp. and the UAW continued to make progress -- so much, in fact, that several subcommittees have already settled some of their issues, people familiar with the talks said Saturday.

“Some of them are finished up,” Chris (Tiny) Sherwood, president of UAW Local 652 at GM’s Lansing Grand River plant, which makes Cadillac cars and SUVs, told the Free Press late Saturday afternoon.

While a substantial amount of work remains, Sherwood, like others, did not expect an agreement by Saturday night.

But the news out of downtown Detroit, where the talks have been ongoing for eight weeks, was encouraging enough that Sherwood, a 40-year UAW member, decided to temporarily close up his local’s standby strike operation.

His local had hundreds of picket signs printed that read “UAW on Strike,” and several members had been staying at the office late into the night, ready to trigger a telephone chain to members to quickly launch a strike.

“We’re going to shut down here right now,” said Sherwood, who has lived through three strikes.

With the VEBA being a seeming inevitability, perhaps it was smart for Gettelfinger and co. to quickly accept the premise and fight like dogs to make it as equitable as possible:

GM executives have long indicated an interest in creating a health care trust, and within the last two weeks, people close to the talks said, Gettelfinger has expressed a willingness to negotiate one.

Two of the main sticking points to creating a VEBA are how much money GM would contribute to the creation of a trust and the source of the assets, labor experts said. People familiar with the talks say GM proposed paying no more than 65% of its estimated liability into a fund. Analysts said union leaders want more than 70%.

They said the automaker would use a combination of cash, stock, real estate and proceeds from new borrowing.

“My sense is that an agreement on the VEBA is there, but that becomes meaningless unless they can agree on the terms,” said Harley Shaiken, a labor expert from University of California at Berkeley, who has been in contact with union members.

“It’s like agreeing to purchase a house -- all you have to do is agree on the price. Well, that’s a big deal.”

Another tough negotiating point has been whether the parties would be willing to share the burden or benefit of future changes in health costs. The UAW wants GM to agree to add money to the trust if costs grow faster than expected. GM wants a refund if costs aren’t as great as expected or a national health care program diminishes the retiree health care burden, analysts and others said.

I just don't get out GM could expect to relieve itself of some of the health burden without paying a real significant chunk up front. Saving even 25% in the long run seems a real deal for them.

Another thing that scratches at the underlying issue of healthcare and business; GM is negotiating for a refund if a national universal healthcare plan is put into place. They're putting into contingency plans what has long been the business community's sworn enemy, universal healthcare, and trying to negotiate a victory out of it. Even in a plan like Edwards', the most progressive of the '08 contenders (outside of Kucinich), GM is conceding that companies would actually have to pay less for healthcare than they do now. And, as we've been beaten over the head with repetition of this fact, healthcare costs are the number one cost per car for the big three (I won't get into the whole competitiveness of the product right now).

So, I beg, are these companies not coming out full force for true universal healthcare? It would only lower their costs, make them more competitive, and make things a hell of a lot easier with the union. But I guess it's just impossible to work toward a common goal with someone you've treated with such hostility and disregard over the years.

Also, just wanted to note the WaPo's coverage of the negotiations; they can't seem to wait even a second longer than the facts require to start fanning strike fires. Here's the third paragraph of their newest story, and note that the first two are one and two sentences, respectively:

"This way, they need no notice to call a strike," said Harley Shaiken, a professor at University of California at Berkeley specializing in labor issues. "It keeps the pressure on the negotiators on both sides of the table to get a deal."

Meanwhile, the Free Press mentions a strike; but as the chunk I quoted from earlier showed, it was about the strike being possibly averted, not imminent.

I guess its sometimes hard for people on a national scale to understand that unions aren't just about going on strike and potentially damaging their poor companies.

Crunch Time

Midnight tonight, the UAW's contract with the big three runs out, and negotiations have yet to produce a new agreement. Ford and Chrysler have extended the contract indefinitely, but GM, the biggest dunce of them all, may be in danger of inciting a strike.

Union officials said they were told to expect a telephone call from Detroit about 10 p.m. EDT telling them whether they should strike or stay on the job.

The UAW chose GM as its lead company and possible strike target Thursday. Typically, the union negotiates a contract with the lead company and then presses the other two Detroit automakers to accept the same terms. Ford Motor Co. and Chrysler LLC have extended their contracts indefinitely, although talks are continuing and either side could break off the contract extension with three days' notice.

The UAW could strike GM after the midnight deadline, or the two sides could continue negotiating and workers would be covered by the terms of the old contract. Jim Graham, the president of UAW Local 1112 in Lordstown, Ohio, said his local union was awaiting word from the union and was ready to strike at midnight Friday.

"We are already set. Everything's in motion," Graham said.

Now, a short strike might not be too damaging, and may have the effect of lowering GM's stock of their shitty truck series. But it's important the UAW doesn't blink; a bad deal could set the stage for years of bad deals to come, for them and the rest of labor.

No surprises here

GM, I guess assuming the ball is totally in their court, has laid out two major direction options for the contract:

General Motors Corp in its contract negotiations with the United Auto Workers union has proposed one option that excludes establishing a union-run healthcare trust but calls for deeper cuts in several areas, the Wall Street Journal reported in its online edition.

That option is one of two proposals GM has put on the table, with the other being establishing such a healthcare trust, which would be funded by GM cash, debt and possibly stock, the Journal reported, citing people familiar with the proposals.

Great. The one commodity you can really count on: GM debt.

And while talks have obviously centered on healthcare, there is more to it, including plant closings; mostly plants that produce the SUV's and trucks that the big three stubbornly continued to pursue construction of.

Those at risk, various experts told the Free Press, include GM's SUV plant in Moraine, Ohio, where more than 2,000 workers build the Chevy Trailblazer and similar models, and Ford's St. Thomas, Ontario, plant, where more than 2,400 workers build the Crown Victoria and similar models.

Chrysler is exploring the sale of Chrysler Transport -- which employs fewer than 1,000 workers and has terminals in Detroit, Ohio and Canada -- and certain parts-related operations, such as warehousing and packaging, though not the entire performance-oriented brand, the Free Press has reported.

...

But Ford's Way Forward 2006 restructuring plan left a lot of details undisclosed, leaving a lot of room for negotiation at the bargaining table.

Ford's revival plan for North America, which was first announced in January 2006 and revamped in September, calls for closing 16 plants, eliminating 44,000 jobs and revamping the car and truck lineup with the goal of profitability in 2009.

But Ford hasn't named six of the plants yet to close, including two assembly and four parts plants.

Yeah, um, that could be an issue.

But all this is moot if this is really the case:

Sources close to union negotiators said UAW President Ron Gettelfinger is reluctant to sign off on a VEBA -- and the automakers are hesitant to give the union what it wants, namely the promise of job security, in exchange for a deal.

That's negotiating, gentlemen. This whole thing is sounding more and more like 2005 all over again.

Changing Tactics to Survive

In most Big Three negotiations, the UAW picks one of GM, Chrysler or Ford to negotiate a model contract with, and then works to apply it to talks with the other two companies. But with the talks so dire, and the companies in such different places, the UAW leadership is popping in the Everything but the Girl remix album "Adapt or Die", and heeding its message on both its own negotiators and those representing the automakers (okay, maybe they aren't listening to the English alt-pop-dance duo, but the message certainly applies).

This time, in order to get the most out of the richer companies without destroying the poorest, they're changing tactics:

The United Auto Workers union appears to be simultaneously crafting new labor contracts with each of the three Detroit automakers, a break from traditional tactics but one motivated by a desire to keep the financially strapped American companies alive.

Detroit automakers in the past have competed for the position of lead company in the contract talks, viewing it as an opportunity to fashion an agreement that put crosstown rivals on the defensive. With this year's contract talks heading into a final two-week stretch, sources close to the talks say the UAW is being careful to complete a deal that doesn't worsen the problems of any one company, especially Ford.

One thing all three automakers agree with (especially GM), however, is that the key to any deal is the union taking on responsibility for health benefits in what is called a Voluntary Employee Benefit Association, or VEBA, in which each of the big three dumping a lump sum portion of owed benefit payments into a trust fund operated by the union; this was the basis of the Delphi and Goodyear agreements. Which has members worried, and leaders releasing statements like this:

The United Auto Workers' top negotiator on its General Motors Corp.'s bargaining team vowed that retirees won't have to pay more for their health care in the next national contract.

"I can tell you one thing, we are determined not to put any more costs on retirees for their health care," said Cal Rapson, UAW vice-president, during a Saturday afternoon speech given to hundreds of UAW members, retirees and their supporters, at the Sloan Museum. Rapson, and UAW president Ron Gettelfinger attended the opening of a labor exhibit at the Flint museum.

Now, a lot of the talk coming from big three corporate headquarters is that the labor costs, ie. pay and benefits, for its long-term unionized workforce, is sky-high compared to those of the non-unionized Japanese automakers, and is irrevocably hurting their bottom lines.

Put aside the superior for this expensive gasoline era product that Toyota, Nissan, Honda and Hyundai put out, there is merit to this complaint. And in an attempt to bolster their ranks, assist the lower paid workers at those plants and get a piece of what have become the world's largest and most profitable automakers, the UAW is also working to even the playing the field for the big three that they must help drag to viability by re-starting with new energy organizing drives at Toyota, etc..

Recently, the company has taken a harder line on wages and labor costs, giving union organizers what they perceive as an opening. Just last week, Toyota told workers in Kentucky they would have to start paying a premium for health insurance for family members.

And over the last few months, Toyota management has summoned small groups of workers here to attend a presentation described by executives as a routine update for workers.

They are shown a map with the locations of shuttered Big Three auto plants and a breakdown of auto workers' average wages, from Thailand to Mexico. While no Toyota executive explicitly says it, the theme of the presentation, according to workers who have seen it, is that Toyota will end up in the same troubled waters as GM if something does not change.

"That doesn't sit well," said Charles Hite, who works on the loading dock at the Georgetown plant and has been with Toyota for 15 years. "They want people to fear losing their jobs."

Hite said that before one of the presentations recently, he gave to his colleagues copies of a news article about the millions of dollars in bonuses Toyota executives received this year. A Toyota supervisor asked him to stop, he said.

Hmm. Sounds like Employee Free Choice Act could have been of some assistance there. T-Minus 8 days until the UAW contract with the big three expires. This weekend should be crunch time.

First dog food, and now toy dogs

Maybe when Michael Vick gets out of jail, he can go play for some Chinese manufacturers, because there seems to be a clear pattern in their attitude towards dogs... oh, and children. At least we're also outsourcing our recalls.

For the third time this summer, Mattel issued a major recall, telling parents yesterday to watch out for Chinese-made toys with excessive amounts of lead, including locomotive toys and accessories for its iconic Barbie brand.

The Consumer Product Safety Commission said the company is recalling 773,900 toys. Mattel said it discovered the use of lead-based paint as part an ongoing investigation of the toys it gets from China and once again found that contractors had used uncertified paint. "We apologize again to everyone affected and promise that we will continue to focus on ensuring the safety and quality of our toys," Robert A. Eckert, Mattel's chief executive, said in a statement. The contractors that used the uncertified paint no longer work for Mattel, the statement said.

The company is recalling 675,000 Barbie accessories, including Barbie Dream Puppy House, in which lead paint was found on the dog, according to the Consumer Product Safety Commission. The recall also includes 8,900 Big Big World 6-in-1 Bongo Band toys and about 90,000 Geo Trax locomotive toys. The products were sold from September 2006 to last month.

Happy Labor Day! Celebrate by scrapping together to buy at Wal-Mart the poisonous toys you used to manufacture until your job got sent overseas!