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Wheels Start to Turn in Auto Talks

General Motors is said to seek a two-tier wage pact.

A day before current contracts expire, negotiations between the United Automobile Workers union and the Detroit auto companies are continuing with the sides still far apart, but there are signs of movement.

The Detroit News is reporting that General Motors is seeking a two-tier wage structure that would allow the company to pay new hires less than current employees.   The main focus of the U.A.W., meanwhile, is on keeping as many union jobs as possible, the paper says, citing people familiar with the talks.

The Wall Street Journal says that the U.A.W. president, Ron Gettelfinger, appears to be warming to the idea of a union-run health-care trust. The Journal says that Gettelfinger has told member of his bargaining team that he agrees in principle with having such a trust, or VEBA. The auto companies have been pushing for a VEBA in order to reduce their enormous costs for health care for employees and retirees.

The companies would fund the trust. And the two sides are apparently far apart on the amount of money needed.

The Journal notes that the U.A.W. negotiated a VEBA with the equipment maker Caterpillar in the late 1990's. The trust ran out of money by the end of 20


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