I hear things are quite tense in the negotiations between the UAW and GM. A Wall Street Journal article gives some info today:

General Motors Corp. and the United Auto Workers resumed talks toward a new collective-bargaining agreement but remained well short of a deal and were probably headed toward a few more days of negotiations, according to people familiar with the matter.

    I don’t know that the UAW really is interested in striking–it would be a tough one…and the company would be insane to take it to that but let’s not underestimate the mental instability in corporate America. The key issue is obviously still health care and the proposal to move the health care liabilities to a voluntary employees beneficiary association (VEBA), a health care trust controlled by the UAW. But, other issues are also key:

While the central issue of the negotiations remains the creation of a health-care trust the UAW would take responsibility for, the auto maker is also proposing wage cuts for some new hires, changes to health-care coverage and other changes.

Negotiations over the trust, known as a voluntary employees’ beneficiary association, continue to be tense, according to these people, but the idea has gained some ground among UAW constituents.

GM is asking to fund the VEBA at a discounted rate, but the fund would work as a sort of two-way street. If the trust should happen to become a surplus due to national health-care or reduced inflation, the auto maker could dip into it for liquidity. But it is also offering to provide a backstop to the trust so that it will stay funded in the future.