Nobody wanted to talk about 2007 last week when General Motors and the UAW reached an agreement giving the automaker relief from its enormous health care bills. That's when GM, Ford Motor Co. and the Chrysler group are expected to press for more concessions from the union in a new national contract.
Last week's agreement, designed to give GM $3 billion a year in pretax savings, is a life preserver for GM, which has staggering health care bills. To fund the savings, retirees will pay a deductible of up to $752 a year, and active workers will forgo a scheduled pay increase of $1 an hour -- if the changes are ratified by UAW members.
UAW President Ron Gettelfinger wasn't talking last week about whether the UAW was prepared to grant similar deals to Ford and Chrysler. Speaking from the Tokyo Motor Show, Ford COO Jim Padilla and DaimlerChrysler AG CEO-designate Dieter Zetsche said they are expecting similar concessions.
The industry will be watching closely to see how far the medicine contained in the new agreement goes toward fixing what ails GM. Regardless, 2007 will be one interesting year.