United Auto Workers local leaders unanimously approved an agreement with General Motors today, setting the stage for a vote of members next week. The contract specifies that GM will inject $29.9 billion into a union-run trust that will assume health care costs, and continue to pay retiree health-care costs until the trust kicks in in 2010, for another $5.4 billion. The company will also backstop the plan with annual payments of $165 million over 20 years, the Wall Street Journal reports.
GM won a long-sought agreement to offer new non-production employees substantially lower wages, starting at $14 an hour, and offer them a 401(k)-style retirement plan instead of a fixed pension. The union won binding commitments from GM to invest in 16 union-represented plants in the US, including some that had been in danger of closing.