UAW and GM Reach Tentative Agreement – Strike Ends

The strike by the UAW of General Motors is now history. The two sides reached a tentative agreement in the early morning hours of September 26th. The union will now administer the health care benefits for retired employees via a trust funded by GM. The two sides also agreed on some bonuses and lump sum payments to existing employees. New employees will get lower wages.

The biggest concern going into the negotiations was a $51 Billion in underfunded health care benefits. The new agreement establishes a VEBA (Voluntary Employees Beneficiary Association). According to reports, GM will absorb 70% of the $51 Billion, or about $36 Billion, which the union will invest and manage. This absolves GM of that responsibility.

The agreement is still subject to approval of rank and file union members. This agreement is expected to be the model going forward in negotiations with Ford and Chrysler. Both GM and Ford spiked up on the news this morning.

For satellite radio followers, the news is positive in that it will keep satellite radio installations stable.

Position – Long Sirius, Long XM, Long Ford, No Position GM