GM and UAW Hit Impasse on Health Care

Talks stalled on funding of union-run trust for medical costs

By Jason Farago, Newser Staff

Posted Sep 20, 2007 6:38 AM CDT

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GM and UAW Hit Impasse on Health Care — Pictured is the exterior of the the General Motors Assembly Plant in Arlington, Texas, Monday, Sept. 17, 2007. As General Motors Corp. and the United Auto Workers returned to the bargaining table, auto shares rose on optimism the two sides were closer to a critical agreement that could take billions... (Associated Press)

General Motors has reached an impasse with the UAW on the transfer of health care liabilities to a union-run trust, a serious blow to the company's plans for rejuvenation. Five days into contract talks, negotiators could not agree on the amount GM would pay into the fund, reports Bloomberg, and talks shifted to other issues. The Detroit Free Press's sources were optimistic a formula could still be hammered out.

There appears to be a several-billion-dollar gap on the amount GM would make in a one-time deposit into the trust; at the union's request the talks have shifted to a possible new 4-year contract that would not involve the transfer of health-care liabilities.
The union chose to negotiate first with GM and then apply the settlement terms to the other automakers. (More General Motors stories.)

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