GM talks said to be nearing last stage

More progress was reported Saturday as negotiators for General Motors Corp. and the United Auto Workers worked on a historic new contract that would shift retiree healthcare costs from the company to the union.

Two people who have been briefed on the talks said Saturday that bargainers were getting closer to reaching a deal on the company funding a union-run trust that would take over much of GM’s $51-billion unfunded obligation to pay healthcare costs for retirees and for current workers after they retire.

The people, who requested anonymity because the talks were private, said they were told negotiators were optimistic that a tentative deal on the entire contract could be reached as early as today or Monday. Any deal would have to be ratified by GM’s 73,000 UAW members.

The UAW has picked GM as the lead company and potential strike target, which could mean Ford Motor Co. and Chrysler would probably match many of the terms of GM’s agreement.

One of the people briefed on the talks said early Saturday that the two sides had not agreed on how much GM would have to kick into the trust, called a Voluntary Employees Beneficiary Assn.

Erich Merkle of consulting company IRN Inc. in Grand Rapids, Mich., said the trust fund was important to closing the U.S. automakers’ labor cost gap with their Japanese competitors. The Detroit companies say the gap is about $25 an hour including wages, benefits and retiree healthcare costs.