Ford, Chrysler wait on UAW

As General Motors Corp. workers discussed and debated the terms of the tentative agreement between their company and their union, the two other Detroit automakers were still waiting for word Monday about when their own negotiations with the United Auto Workers would resume.

Despite suggestions by UAW President Ron Gettelfinger that talks with Ford Motor Co. and Chrysler LLC could resume by Monday, the meeting rooms were empty in Dearborn and Auburn Hills.

In the meantime, like GM workers from California to Delaware, executives at both Ford and Chrysler continued to study the GM-UAW agreement.

As details of that accord continue to emerge, there is a growing feeling on Wall Street that the deal does not go far enough to address the wide cost gap that separates GM and the other domestic carmakers from their Asian rivals.

"GM may be ceding more value to the union than we previously thought -- namely, pension benefit hikes that could be worth over $6 billion. Also, the (retiree health care) liability appears to stay with GM until 2010, leaving it with related cash costs estimated at $5.4 billion over the next two years," said Goldman Sachs analyst Robert Barry.

"So, it is hard for us to see how investors would not come away feeling more negative about contract terms."

Rod Lache of Deutsche Bank said the two-tier wage provision included in the agreement could save GM $800 million a year if most of the eligible positions were filled with new, lower-paid hires.

But he said "there are still big unknowns in the accounting treatment" of other key elements of the contract, including the voluntary employees' beneficiary association, or VEBA, that will assume responsibility for retiree health benefits if the contract is approved.

The UAW could not be reached for comment Monday.

You can reach Bryce Hoffman at (313) 222-2443 or bhoffman@detnews.com">bhoffman@detnews.com.