February 18, 2009 at 3:27 pm

Big 3, UAW reach pact on givebacks

The United Auto Workers has reached tentative agreements with Detroit's Big Three automakers on cost-cutting concessions to their 2007 national labor pacts, but talks continue over changes to retiree health care funding.

Neither the automakers nor the union would discuss details of the agreements on Tuesday, but people familiar with the discussions at General Motors Corp. and Ford Motor Co. say the deals do not include wage cuts. The sources also said there are no significant differences in the tentative pacts with the three automakers.

GM and Chrysler LLC have been in negotiations with the UAW to hammer out concessions under the terms of a $17.4 billion federal loan package to keep them afloat. Ford Motor Co. wanted similar givebacks though it is not seeking immediate government aid.

The loan terms called for GM and Chrysler to cut labor costs to be more in line with workers at foreign-owned U.S. auto plants. The government also wants the automakers to pay half of what they owe a UAW health care trust in company stock rather than cash, a move that could save them billions of dollars. The UAW-run trust will pay for retiree health care beginning next year. Negotiations continue over the health care funds, known as Voluntary Employee Beneficiary Associations, or VEBAs.

"The changes will help these companies face the extraordinarily difficult economic climate in which they operate," UAW President Ron Gettelfinger said in a statement. "Discussions are continuing regarding the (VEBAs) at all three companies."

He said terms of the tentative pacts would be withheld until the VEBA talks were finished and the agreements ratified by workers.

A person familiar with the discussions at Chrysler and Ford said current wages have been protected in the tentative pacts. Further, while the UAW has already eliminated the jobs banks program at the automakers, the tentative agreements extend the amount of time laid off workers receive with at least partial pay for up to two years, depending on seniority.

The current $28-an-hour wage of UAW workers and the jobs bank -- a program that allowed workers to receive nearly full pay while laid off -- became the target of criticism in recent years as Detroit's automakers faced intense competition from lower-cost foreign rivals. Gettelfinger has long argued that UAW wages are competitive.

The $28-an-hour wage is fading out at Detroit's Big Three. New hires now start at $14 an hour.