* GM, UAW close in on new deal on wages and benefits
* Talks made "great progress" since Thursday-source
* Tenn. officials met GM in bid to revive Saturn plant
(Adds detail on proposal regarding healthcare costs)
By Bernie Woodall
DETROIT, Sept 16 General Motors Co (GM.N) and
the United Auto Workers union were nearing a new contract for
49,000 production workers in talks in Detroit on Friday, people
with direct knowledge of the negotiations said.
"I am very optimistic that the negotiations process is
entering its final stage," UAW Vice President Joe Ashton said
in an update for the union's GM workers posted online.
"I am happy to inform our membership that we are getting
very close to a framework for an agreement that will bring our
negotiations to a successful conclusion."
The UAW chose to try for an agreement with No. 1 U.S.
automaker GM first, before reaching a deal with Chrysler and
finally with Ford Motor Co (F.N), those close to the talks have
The talks have played out at a time of increasing
uncertainty about the strength of U.S. auto sales for the
remainder of this year and in 2012, as well as concern about
the risk of another recession.
GM and the other two Detroit automakers have offered
one-time contract-signing bonuses and profit-sharing rather
than traditional wage increases, while the union has sought
higher wages for entry level workers and cost-of-living
At stake are wages and benefits for about 113,000 unionized
U.S. auto workers who have gone without a base pay increase
One of the priorities for the union has been to secure
commitments by the automakers to bring more vehicle production
to the United States. Heading into the contract talks, Ashton
had said the union's priority would be "jobs, jobs, jobs."
In a sign there could be some consideration of reviving
GM's former Saturn plant in Spring Hill, Tennessee, a
delegation of local officials, including the mayor of Spring
Hill, met on Thursday with GM in Detroit.
The Saturn plant had been the site of GM's experiment with
a new model of production and a more collaborative relationship
with workers based in part on the model of Japanese automakers
led by Toyota Motor Corp (7203.T).
GM scrapped the Saturn as part of its 2009 bankruptcy and
the assembly portion of the plant has been shut. An engine
plant at the site remains open.
Spring Hill Mayor Michael Dinwiddie said GM officials had
given him no indication of whether the Spring Hill assembly
plant would reopen.
"We gave them a business update, and the plant status is
unchanged," GM spokesman Greg Martin said of the meeting.
A key sticking point at GM, according to people familiar
with the talks, had been the amount of signing bonuses offered
to workers. Any settlement must be ratified by the union's
GM had proposed a signing bonus of close to $3,500 per
worker based on recent manufacturing contracts negotiated by
the union, but the UAW pressed for a higher figure. Most
analysts expect an agreement of $5,000 to $7,000.
That would cost GM between $245 million and $343 million.
GM stock has dropped 43 percent to $22.53 since its early
2011 high and is down 32 percent since its staring IPO value of
$33 last November.
One of the issues tackled by negotiators in the last few
days was healthcare costs, a person briefed on the talks said.
GM workers now pay an estimated 7 percent of their healthcare
costs compared with 33 percent on average in other industries.
As part of a bid to offset the cost of bonuses, GM had
proposed shifting a bigger burden of those costs to UAW
workers, the person said.
The UAW gave up the right to strike at GM and Chrysler
through 2015 as part of the federally funded bailouts of the
Four-year contracts at all three automakers were extended
beyond their Wednesday night expirations.
That follows the pattern of earlier talks, although UAW
President Bob King and the automakers had held out hope for a
speedier resolution this time.
Chrysler is managed and majority-owned by Italy's Fiat SpA
(Editing by Lisa Von Ahn, Andre Grenon and Steve Orlofsky)