As Talk Of Union-Run Pension Fails GM Strike More Likely

Douglas A. McIntyre

According to several media reports, the UAW has walked away from a GM (GM) proposal to put money into a health care fund covering employees and managed by the union. GM wanted the deal to get the liability off of its balance sheet, but the UAW wanted too rich a deal for the amount that it would receive.

The talks now move to other issues, but GM had a tremendous stake in off-loading the liability. It will likely bargain harder for cuts its pension and labor costs. There is even suggestion that GM would begin to move its manufacturing jobs out of the US, something the union cannot abide.

With GM likely upset that it is not getting what it wants and with a need to push for concessions to get its North American operations profitable, it is much more likely that the union will see its role diminishing and call a strike.

Douglas A. McIntyre