From Detroit Free Press

The UAW has selected General Motors Corp. to be the lead negotiating partner, also known as a strike target, in the year's national contract talks, leading workers, analysts and labor experts to believe the union has agreed -- in principle -- to establish the retiree health care trust that the nation's largest automaker so desperately wants.

The union has agreed to indefinite contract extensions with Ford Motor Co. and Chrysler LLC. Either side can break off the extension with three days' notice.

"The UAW International Executive Board has decided that General Motors Corp. will be the strike target for this round of national automotive contract negotiations," Cal Rapson, UAW vice president told local leaders by email.

Labor experts and automotive industry analysts say the announcement is great news for GM and could mean the parties are willing to negotiate the retiree health care trust -- known as a Voluntary Employee Beneficiary Association (VEBA). GM has been pushing to move its retiree health care obligation off its books and into a trust run by the UAW.

UAW communications to local leaders earlier Thursday said things were not progressing as well as expected. But people with knowledge of the talks said there had been signs of progress. The UAW's contract with GM expires at 11:59 pm today.

Gerald Meyers, a University of Michigan business professor and former chief executive officer of American Motors praised the development, saying it is a good sign.

"It means the UAW is playing it straight," Meyers said. "They're going right into the teeth of the tiger. They're going to try to work something out with people who very much want to work something out."

Canadian Auto Workers President Buzz Hargrove, who has negotiated several contracts, said it could be a sign that the union is willing to negotiate a VEBA.

"If they've decided to agree to a VEBA...it makes sense for GM to be the target," he said.

What it Means for the Automakers

In the years the union has identified a target, the UAW traditionally has chosen the healthiest automaker.

Some had wondered whether the UAW might pick Ford because of the automaker's financial weakness -- the argument being that Chrysler and GM surely could handle anything Ford agreed to.

Meyers said he never bought into that thinking. "Everybody wants to be number one. Everybody wants to be the lead company. Everybody wants to get the contract that favors them and doesn't favor their competition," he said.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, said the union was worried that negotiating with Ford first would complicate negotiations with Chrysler and GM.

With a contract agreed to at GM, Cole said the UAW could then negotiate something to help Ford. But special exemptions for Ford are hardly guaranteed.

VEBA Matters Being Considered

While little progress may have been evident in the main negotiations, people familiar with them said that the union was privately working toward the VEBA.

The UAW has been discussing who on its staff would have a role in the administration of a multibillion health care trust should the union and Detroit automakers agree to one as part of a new national contract, the people said. Rapson would be among those with a role, the people said.

Cole said he's heard from several UAW members who believe a VEBA must be managed on a day-to-day basis by an independent expert.

"The UAW is a pretty clean union, but that is such a huge amount of money, that it’s best to be handled by a total independent source -- and it will be," Cole said.

He said he expects that the UAW would likely have "some sort of interface," such as a board of directors, to oversee the fund.

Workers Ready to Strike

The UAW did not describe any specific issues, such as pay, pension, health care or work rules, in communications to members.

"We are continuing to meet with the corporation and expect to put in long hours between now and the deadline," Rapson said Thursday in an afternoon email. "There is still much to be done."

At noon Thursday, GM international servicing representatives notified local leaders that the union had been identified as a target, and that things were not "progressing as well as expected at the national negotiations and that the shop committee needs to be present at the union hall," at 10 pm Friday to hear whether the parties would extend contract talks or call for a strike, according to a posting at a UAW local.

Local leaders at all three automakers told the Free Press that they have already created strike assignments and picket signs, though most believe a strike is unlikely. Still, they said, the union needs to demonstrate that it could strike to leverage any power it has in negotiating for the best possible contract.