UAW reaches tentative agreement with GM

After ratification, the VEBA memorandum would have to be approved by the courts and would be reviewed by the U.S. Securities and Exchange Commission, GM said.

One of the people briefed on the contract said that because GM’s pension fund has more money than its expected obligations, both sides agreed to tap into it to fund the trust. Retirees also would get a pension increase, but it would be offset by an equal increase in health care contributions, the person said.

In exchange for their ratification, union members would get a one-time bonus of $3,000 and then bonuses of 3 percent, 4 percent and 3 percent of their annual pay each year for the last three years of the contract, said one of the people briefed on the contract.

GM also committed to future investments in U.S. plants, the person said. Gettelfinger said job security was the major issue that caused the strike, but he wouldn’t say Wednesday whether GM has promised specific future products to U.S. factories.

The person also said GM would hire temporary auto workers at full company wages and benefits. The company has approximately 6,000 temporary workers, the person said. Temporary workers who have been at the company for less than 90 days would be hired at a lower wage, the person said.

The pact also includes a lower wage structure for newly hired workers in certain non-manufacturing jobs such as sanitation workers, that person said. The person said to make way for the new hires, GM would offer early retirement and buyout packages of $35,000 to workers now in the positions.

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Wall Street applauded news of the deal, sending GM shares up $3.22, or 9.4 percent, to close at $37.64. Standard & Poor’s Ratings Services said it may raise GM’s long-term debt rating, which currently is below investment grade.

Gettelfinger said he will decide this week which automaker will go next.

Neither Ford nor Chrysler would comment on the GM deal, and both said they had not heard from the union about the next round of bargaining.

At factories across the country, workers were awaiting details of the pact from the union, with many hoping that GM would guarantee a new car or truck for their factory.

One of those plants is the sprawling Lordstown, Ohio, complex near Cleveland where Chevrolet Cobalts and Pontiac G5s are made. GM plans to stop production of the cars after the 2009 model year and hasn’t said if Lordstown will get another vehicle to make.

Jim Graham, president of one of two UAW locals at the 3,200-worker complex, said that based on his experience, there won’t be any specific guarantees of products for plants until local negotiations on work rules and other issues are completed.

“I think it’s a bargaining chip for management locally, not just at Lordstown,” he said. “But we’ll get there. I’m very confident.”

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