DETROIT (Reuters) - The United Auto Workers union set a firm Monday morning deadline to reach a contract with General Motors Corp and threatened to send 73,000 GM factory workers on strike if no deal is reached.þþThe strike deadline raised the stakes in the closely watched labor talks after a weekend of bargaining had apparently brought the two sides close to a historic cost-cutting deal for the automaker.þþA prolonged work stoppage would be a major setback for the car manufacturer's recovery efforts and risk disappointing investors who have sent GM shares higher in the hope of a ground-breaking labor deal.þþNegotiations between GM and the UAW, which have been under way for three weeks without a break, have hinged on a GM proposal to cut its nearly $5 billion in annual health-care bill by establishing a trust fund for retiree-related costs.þþBut in setting a ÿfirmÿ Monday strike deadline, the UAW said it was reacting to GM's reluctance to guarantee to preserve U.S. production jobs as it restructures.þþÿWe're shocked and disappointed that General Motors has failed to recognize and appreciate what our membership has contributed during the past four years,ÿ UAW President Ron Gettelfinger said in a statement.þþUAW members, Gettelfinger said, had made ÿextraordinary effortsÿ to help GM cut costs, including an earlier buyout program that cut more than 34,000 factory jobs from the automaker's payroll.þþChris ÿTinyÿ Sherwood, president of UAW Local 652 in Lansing, Michigan, said the union's leadership had told him to be prepared to meet the pending strike deadline.þþÿThey told me to walk them at 11 a.m. unless I hear otherwise,ÿ said Sherwood, whose local represents more than 1,500 GM workers who make three Cadillac models.þþBoth sides continued to talk in Detroit as of early Monday morning, extending a session that began on Sunday morning.þþÿWe are fully committed to working with the UAW to develop solutions together,ÿ GM spokesman Dan Flores said. ÿWe will continue focusing our efforts to reach an agreement as soon as possible.ÿþþHarley Shaiken, a labor expert at the University of California-Berkeley, said the union had increased the pressure for a quick settlement with GM.þþÿThis is not an idle threat,ÿ he said. ÿA strike deadline is not meant for show. But it is possible that this will be a long night with a handshake at the end of it.ÿ þþRETIREE HEALTH PLAN AT ISSUEþþGM and UAW negotiators had agreed during the weekend to the broad terms of a deal that would reduce GM's annual health-care bill, people briefed on the talks said.þþUnder that plan, GM would shift responsibility for retiree health care to a new UAW-aligned trust fund known as a voluntary employee beneficiary association, or VEBA.þþWall Street analysts have said establishing a VEBA could cut GM's annual costs by $3 billion in exchange for a one-off payment expected to top $30 billion.þþExpectations for a cost-cutting labor deal have sent GM shares up almost 14 percent this month.þþThe outcome of the contract talks is seen as crucial to efforts by the three Detroit-based automakers -- GM, Ford Motor Co and Chrysler LLC -- to recover from combined losses of $15 billion last year and sales difficulties that have driven their share of the U.S. market below 50 percent.þþGM, Ford and Chrysler are seeking concessions from the UAW to close a labor cost gap with Toyota Motor Corp <7203.T> and other Japanese automakers operating in the United States that they say amounts to more than $30 per hour for the average factory worker.þþMost analysts have seen a strike as a remote risk because of the weakened position of GM, which has seen its sales slip 7 percent this year and announced plans to close a dozen factories by next year.þþÿA token strike is possible, but we suspect the primarily motivation of the strike announcement ... may be to pressure GM to finalize lingering issues in the contract,ÿ JP Morgan analyst Himanshu Patel said in a note for clients.þþÿThe fact that the UAW-GM talks have continued for so long past expiration is a broadly encouraging sign ... It suggests GM is fighting hard, but it may also signal that the UAW may not have many other viable options on its hands,ÿ he said.þþThe union's previous contract expired September 14. The last UAW strike against GM was in 1998. That walkout at two GM parts plants in Flint, Michigan, shut down GM production and caused its sales to plummet.þþGM's market share never recovered and the automaker responded to the work stoppage by overhauling its labor relations department. GM's U.S. market share had been 31 percent before the strike, but fell to 24 percent last year.þþThe UAW has not called a national strike during contract negotiations since 1976.þþ
Source: NY Times
