GM & UAW Reach Historic Deal, Stike Ends

General Motors and the United Auto Workers (UAW) have announced that they’ve reached a contract agreement, ending a two day nationwide strike, a first for GM since 1970 which saw 73,000 workers halt all operations (click here). According to reports, under the agreement UAW will overtake the burden of retiree health care costs from General Motors (estimated at $51 billion) in exchange for a one-time payment - a centrepiece of GM’s CEO Rick Wagoner's goals for the talks. The American carmaker would pay about 70% of the obligation into the trust, called a Voluntary Employees Beneficiary Association, or VEBA. The workers union will then invest the money and take over health care responsibilities for about 340,000 GM hourly retirees and spouses. -Continued after the jump

“This agreement helps us close the fundamental competitive gaps that exist in our business,'' GM's Wagoner said in a statement. “The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments.”

UAW President Ron Gettelfinger told reporters, “It's an agreement we're proud to recommend to our membership”.

Though UAW members will have to pass the agreement through a union voting this weekend, (Union leaders will be briefed on Thursday and Friday), it is considered a done deal. The agreement will replace a four-year contract at Detroit-based GM that was set to expire Sept. 14. The UAW is also expected to decide on Thursday what automaker it will negotiate with next. Think we’ll see any strikes at Ford or Chrysler?

Via: usatoday & Bloomberg