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G.M. In Deadlock With Union, for Now

The two sides can't agree on terms to fund health-care costs.

General Motors and the United Auto Workers union have reached an impasse over the funding for a trust to cover retirees' health-care benefits, according to several reports. After five days of intense negotiations, the two sides have decided to temporarily shelve the topic and move on to other issues.

The contract between the automaker and the union expired at 12:01 a.m. on Saturday. This latest setback suggests that a settlement between the two sides could still be weeks away.

Until now, the talks have centered on how General Motors can pay the U.A.W. to cover about $50 billion in retiree health-care costs. The Detroit News reports that the automaker has offered to contribute at least 65 cents on every future dollar owed for retiree health-care coverage. The union is demanding more, and the two sides are billions of dollars apart.

The U.A.W. also wants a promise from G.M. that it will cover additional costs if their medical expenses rise faster than projected, the paper reports. G.M. wants to be able to reduce its contributions if some national health-care legislation passes that would lower its retirees' medical costs.

For now, the talks will turn to other issues including job security, wages, and pensions. Ford Motor and Chrysler were also seeking similar arrangements for health-care funds with the union. The contracts with those two automakers, also expired, have been extended indefinitely. The contract with G.M. continues to be extended on an hour-by-hour basis.


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