The UAW has reached a tentative understanding with the U.S. Treasury and General Motors on an addendum to the 2007 UAW GM collective bargaining agreement.
Details are being withheld pending explanation and ratification meetings for UAW GM members, which are in the process of being scheduled. The union apparently wants the ratification complete before the June 1 deadline imposed by the Treasury, meaning the company and the union had to come to terms this week.
The UAW officials, however, said the tentative understanding contains modifications to the labor agreement and to the independent Voluntary Employee Beneficiary Association (VEBA) trust.
The union didn’t offer any hints on whether its bargainers had received some assurances on plant closings.
In a letter to Congress last week, UAW legislative director Alan Reuther had complained GM’s restructuring plan relied heavily on foreign imports but closed plants. For example, one source said this week it is widely assumed that GM is preparing to close permanently the company’s assembly plant in Spring Hill, Tennessee, as part of the next round to restructuring announcement.
The very existence of Reuther’s letter could make it difficult to win ratification of the concession agreement unless it included some explicit pledges to keep open certain plants open in the U.S.
Complaints about the plant closings included in the in the restructuring have become a major controversy for Obama’s Auto Task Force, which is being accused of misleading key Congressman about the shutdown.
“Tis is all the doing of Obama’s economic team,” said one UAW activist who said she believed the shutdown had been ordered by White House economic czar Larry Summers.
GM Statement Regarding Tentative UAW Agreement
Attributable to Diana Tremblay, Vice President, Labor Relations:
GM is pleased to announce that it has reached a tentative agreement with the United Auto Workers, which was required to meet competitive costs benchmarks and the expectations of the U.S. and Federal governments for significant further reductions in the company’s longer term liabilities.
The tentative agreement is a critical step forward toward ensuring GM’s future in the U.S.
Changes to the collective bargaining agreements are subject to ratification by UAW membership and approval by GM’s board of directors. The tentative agreements are consistent with the conditions and disclosures made in GM’s prospectus and supplements to the prospectus for the pending exchange offers to bondholders.
The financial impact of the terms of the agreement are not expected to be materially different from the viability plan estimates included in the documents for the exchange offers.
Details of the definitive terms of the tentative agreement are not expected to be publicly disclosed by GM until after member ratification is complete.
In addition, GM has reached a non-binding understanding with the UST and UAW with respect to modifications to the UAW VEBA agreements. The understanding is subject to several conditions including, but not limited to, final documentation, ratification by the UAW membership, approval by GM’s board of directors and court approval. Details of the terms are not expected to be publicly disclosed by GM until after definitive terms have been agreed and UAW member ratification is complete.
To the extent the exchange offers remain open at the time the definitive terms are publicly disclosed by GM, GM will extend the exchange offers and extend (or reinstate) withdrawal rights, in each case, to the extent required by applicable law.