September 18, 2007 in Business

Shares rise as union, GM continue talks

Dee-ann Durbin Associated Press
 

DETROIT – Contract talks between the United Auto Workers and General Motors Corp. stretched into Monday evening amid optimism that the two sides were closer to a critical agreement that could take billions in retiree health care costs off GM’s books.

The optimism pushed auto stocks higher on Wall Street, but at the factories, workers were less certain as they spent a third day without a new contract.

Negotiations resumed about 11 a.m. Monday after bargainers stopped to rest about 3 a.m., and talks were continuing into the evening, GM spokesman Tom Wickham said.

Bargainers were making progress but still had a lot of work to do, according to a person who was briefed on the talks and who spoke on condition of anonymity.

GM shares, which rose 15 percent last week, continued to rise throughout the day Monday, bucking a downward trend in the markets ahead of the Federal Reserve’s decision on interest rates today. GM shares were up $1.01, or nearly 3 percent, to close at $35.23.

Ford Motor Co. shares, which rose at a more modest pace last week, also were up after Bear Stearns upgraded Ford and said a deal on health care costs could be even better news for the No. 2 automaker than for rival GM. Ford shares were up 25 cents, or 3 percent, to close at $8.28.

Chrysler shares no longer trade on the NYSE.

Pete Hastings, an auto industry corporate bonds analyst with Morgan Keegan & Co., said investors should be confident because the two sides appear to be moving closer to a settlement that would avoid a strike.

But the mood in GM’s plants was subdued as workers awaited word on the talks. After a weekend of marathon bargaining, GM workers were on the job Monday at the automaker’s 82 U.S. facilities, including assembly and parts plants and warehouses. The UAW represents around 73,000 GM auto workers.

Chris “Tiny” Sherwood, the president of Local 652 in Lansing, said workers were calling him to see if they should report for work or picket duty.

Emmett Faulkner, 49, a 30-year veteran of GM, said he wasn’t worried about his job because he believes his plant, a transmission facility in Warren, is critical to GM. But he’s concerned about GM’s plan to turn over retiree health care to the UAW.

“This is our livelihood here, you know,” he said.

© Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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