Union panel approves GM contract

General Motors Corp.’s new contract with the United Auto Workers was unanimously approved Friday by a panel of union officers, clearing the way for a vote by rank-and-file members within 12 days.

Under the four-year agreement, GM will put $29.9 billion into a retiree health trust fund that takes effect in January 2010, according a union summary. GM will continue to pay retiree healthcare costs at the current rate, estimated to total $5.4 billion, until the fund takes over, the UAW said.

The deal, highlighted by the retiree fund, included other provisions that GM Chief Executive Rick Wagoner said he required to close a $25-to-$30-an-hour labor gap with Toyota Motor Corp. In exchange for the concessions, UAW President Ron Gettelfinger gets job guarantees and pay improvements for his workers.

“The UAW took care of their membership; GM took care of their shareholders,” said Richard Block, a labor professor at Michigan State University. “The people who will be voting on this will be pretty happy.”

About 175 officials from UAW locals voted on the accord at a meeting of the union’s National Bargaining Council in Detroit. The vote in favor was unanimous, Gettelfinger said. He said he expected the union’s 73,000 GM members to approve the deal as well.

Detroit-based GM declined to comment.

The union said the average worker would gain $13,056 over the life of the agreement, based on a 2,080-hour year and 10% overtime. That includes a $3,000 bonus in the first year with a 3% bonus in the second year, 4% in the third and 3% in the fourth. An assembly worker’s hourly rate will rise to $28.85 at the end of the fourth year from $28.12.

GM, the largest U.S. automaker, and the union reached the agreement Wednesday after a two-day strike. If ratified in votes scheduled through Oct. 10, it would replace a four-year contract that expired Sept. 14.