So far, so good. General Motors' new plan to reduce health care costs is an important first step in GM's campaign to restructure its North American operations.
GM and the UAW have demonstrated that they can work together to solve problems. GM can't fix some problems until 2007, when it negotiates a new labor contract with the UAW, but the two must continue talking.
A nagging issue is that GM is still supersized. By one estimate, GM has enough manufacturing capacity to support a market share of 35 percent, while its actual market share is about 27 percent for the year to date.
As a result, the automaker must close factories and eliminate at least 25,000 of its 110,000 manufacturing jobs in the United States. It will be painful, but necessary.
That leads to the issue of the jobs bank, which allows laid-off workers to earn 90 percent of their pay for doing no work. Currently, some 12,000 workers laid off from Big 3 and Delphi Corp. factories are in the jobs bank. In the 1980s, the Big 3 agreed to the program to maintain labor peace. But the jobs bank must be eliminated as soon as possible.
The UAW has acted in good faith. So top executives and salaried employees must make sacrifices, too.
To make this restructuring a success, GM and the UAW must work together toward a common goal.