United Auto Workers officials have unanimously endorsed a new cost-cutting labour agreement with General Motors, paving the way for a quick ratification this week.

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The UAW, in documents prepared for its members, said that it was required to make a series of changes to a retiree healthcare trust and other benefits in order for GM to receive additional government support, according to Reuters.


Among the changes are cuts to retiree medical benefits with immediate effect at the insistence of the US Treasury because of GM’s “difficult financial situation”, the report said, adding that retiree benefits could be cut further in 2010 and 2011 because of the “uncertainty regarding the long-term value of the GM stock” received by the VEBA.


GM will assume ownership of five Delphi plants as part of its restructuring plan which will be operated as a wholly owned subsidiary.


GM has also agreed to reactivate three U.S. assembly plants and one stamping plant if sales exceed expectations and will build compact and small car assembly operations in the United States using one of its idled plants represented by the UAW.

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New buyouts to all UAW-represented employees will be offered under a programme that will be presented to workers by June 9.


Employees will then have 45 days to accept the buyouts.


Other changes, cited by Reuters, include UAW workers being eligible for time-and-a-half overtime only after working 40 hours in a week, break time reduced to 40 minutes per eight hour shift, and cost of living adjustments not paid for the duration of the modified contract. Performance bonuses will not be paid in 2009 and 2010.