The agreement General Motors and the UAW reached early this morning, after a 2-day walkout, could make a significant difference in Detroit's long, losing battle with foreign competitors who enjoy lower labor costs, the Wall Street Journal reports. GM successfully offloaded spiraling medical costs by forming a union-controlled trust, and won the right to buy out thousands of highly-paid workers and replace them with younger labor at lower rates.
In return, the union won commitments from GM to invest in US plants that will employ UAW members. How much the company finally agreed to contribute to the health-care trust that will assume more than $50 billion in liabilities has not been disclosed, but Journal sources put the figure as high as $35 billion. The agreement must be ratified by union members.