That Was Quick

The first strike of GM in 37 years is over in two days.

Details of the proposed contract were sketchy, but GM and the UAW confirmed that it would create a trust fund financed by GM and run by the union that would administer healthcare benefits for retired GM workers.

GM's primary goal in the talks was to erase a $25-an-hour disparity in labor costs between the Detroit automakers and Japanese companies such as Toyota Motor Corp., which have non-union workers at U.S. plants.

GM, Ford Motor Co. and Chrysler have a combined $90.5 billion in unfunded retiree healthcare obligations on their books. GM reportedly will be able to shift about $36 billion of its $50 billion in retiree healthcare obligations into the trust fund.

The proposed contract also creates a two-tier wage scale, which would establish a lower pay scale for new workers hired into non-manufacturing jobs, such as janitorial and landscaping positions.

In return, the UAW won concessions on job security, a key bargaining point that was largely responsible for prompting the union to abruptly call a strike Monday.

Doesn't sound all that great to me, but the gun was pointed squarely at the UAW's head. "Accept this or we'll move all of our plants" seemed to be the choice. However, moving all of that healthcare legacy costs into the union trust fund may increase portability, if some partnerships with other unions can be made. That's something to look at for the future.