Auto workers on strike against General Motors

I'm watching the UAW/General Motors labor negotiations with great interest--Mr. Noddy's retiree health benefits could be affected.

Detroit, Mich. -

The United Auto Workers and General Motors have reportedly reached agreement in their contract negotiations less than an hour after employees at an unknown number of plants walked off the job following a strike deadline.

Television news channels in Detroit, citing sources in the union, said both sides had reached agreement. A 12:25 PM ET news conference has been scheduled. Neither the company nor the union could be reached for comment, and the report could not be confirmed by Forbes.com.

The two sides spent much of the time discussing retiree health care. Health care liabilities add more than $1,000 to the cost of each vehicle made by General Motors. Detroit automakers want to trim these expenses to compete better with foreign rivals, but workers are reluctant to give up benefits as their medical costs skyrocket. (See: "GM To Union: Trust Us")

The two sides are considering a type of health care trust fund called a voluntary employee beneficiary association, or VEBA. Such a fund could save General Motors billions of dollars in retiree costs. In a VEBA, GM would provide the initial money to fund the trust. The UAW would assume responsibility for managing and investing the money, which would be used to pay for retired employees' health care costs.

Dys--

Thanks--and keep your fingers crossed.