The United Auto Workers union and General Motors Corp reached a tentative contract on Wednesday to end a national strike by 73,000 workers with a deal that includes a groundbreaking health-care trust fund.
Union President Ron Gettelfinger, speaking at a news conference at the union's Detroit headquarters, said production at GM facilities would resume on Wednesday, ending the first national UAW strike against GM since 1970 after two days.
Gettelfinger said the union expected to hold a meeting with the local unit presidents to go over details of the four-year agreement on Thursday afternoon or Friday morning to allow for local ratification meetings nationwide over the weekend.
Ratification requires a majority vote of UAW members.
We feel very confident it will be ratified, Gettelfinger said.
GM shares jumped 7.3 percent to 26.2 euros in Frankfurt trading after the deal was announced.
GM said the national agreement paves the way for GM to significantly improve its manufacturing competitiveness and maintain a strong production presence in the United States.
There's no question this was one of the most complex and difficult bargaining sessions in the history of the GM/UAW relationship, GM Chief Executive Rick Wagoner said in a statement.
Gettelfinger led the UAW out on strike Monday against GM, saying that the top U.S. automaker had not met the union's demands for guarantees on job security. He seemed confident striking GM workers would be happy with the deal.
I think our retirees will be exceptionally pleased with this contract and for our active membership, there will be some changes, but overall they will be very, very pleased with the outcome of this negotiation and the job security that is associated with this, Gettelfinger said.
Gettelfinger said he expected GM's UAW employment in the United States to be about unchanged four years from now, depending on GM's production volumes.
I think that number will be pretty much the same, if not higher, Gettelfinger said.
The contract includes a memorandum of understanding to create an independent trust for retiree health-care. Neither GM, nor the UAW officials elaborated on the details of the trust.
Gettelfinger told reporters the union expected the health-care trust to provide steady funding for 80 years, based on cash flow and solvency projections.
The new UAW-aligned trust, known as a Voluntary Employee Beneficiary Association, or VEBA, must receive court approval, and GM said the U.S. Securities and Exchange Commission would conduct a review of its accounting treatment as well.
A GM spokeswoman said the automaker would not provide details of the agreement until it was presented to UAW workers for ratification.
Wall 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.
Gettelfinger said a decision on the next bargaining target for a new contract -- either Ford Motor Co or Chrysler LLC -- could be made on Thursday this week.
We are not going to spend a lot of time waiting here, we feel very comfortable with this agreement and we are going to move on ..., Gettelfinger said.
If the deal with GM is ratified, that could raise the pressure on the other two U.S. automakers to come to a deal with the UAW quickly on similar terms.
Talks between GM and the UAW dragged on for 10 weeks and passed the September 14 deadline when the old contract expired. The walkout on Monday came as a surprise as the two sides had appeared on the verge of a deal at the weekend.
Most analysts expected the strike to be short as neither side would profit from a prolonged walkout. GM would lose badly needed sales and workers would be forced to survive on strike pay of just $200 a week.
(Additional reporting by Kevin Krolicki)