While the General Motors (NYSE:GM) deal with the UAW doesn't guarantee the stock will prove a good investment, it certainly increases the odds.

If you're a Wall Street Journal subscriber, you can read a typically-excellent overview of the deal (plus a good bit of historical background) here.

And Bloomberg has a good article on how the deal allows Rick Wagoner and GM get back to the business of selling vehicles. An interesting bit:

"If I were General Motors, I would be extremely happy,'' said Michael Robinet, an analyst at CSM Worldwide Inc. in Northville, Michigan. "This could very well be Rick Wagoner's legacy to the company.''

Yeah, it well could. Regular readers of this blog know I always took an even-handed view of Wagoner. Back when Kirk Kerkorian was involved, people were talking of bringing in Carlos Ghosn, and getting rid of Wagoner, I felt that GM's problems wouldn't be solved by getting a new CEO. It wouldn't be a magic bullet.

I wasn't pounding the table to keep Wagoner. But I wasn't among the lynch mob crowds wanting him to be shown the door. Besides, I pointed out at the time that GM's top five or six shareholders held most of the company's stock -- including smart folks like Southeastern Asset Management and Brandes. So people a lot smarter -- and A LOT more powerful -- than me could decide who ran GM.

And they apparently did -- by more or less doing nothing. Which meant leaving Rick Wagoner and his team in charge.

In time, that could always prove to have been a bad move. It doesn't now, though.

I'm not suggesting it's time to whip out the glasses and start popping corks. But with Rick Wagoner GM has taken some major steps in bringing that time closer. And he deserves credit.

Bloomberg reports the agreement includes a "new class of jobs" that pays about half the current rate, breaking with the UAW's tradition of equal earnings for union members.

A couple of interesting bits:

"This is a really big deal,'' said David Lipsky, a professor of collective bargaining at Cornell University in Ithaca, New York. "The UAW has always prided itself in being an egalitarian organization: `We all hang together, with equal treatment for everyone.'''

And:

GM will offer buyouts to entice existing workers who would be classified as non-core to leave, and the new pay structure would apply to their replacements, the people said. Current workers wouldn't have their pay cut.

"The company likes it because it cuts compensation costs and the union can swallow it because the people affected aren't going to vote because they don't exist yet,'' said Richard Block, a labor professor at Michigan State University in East Lansing.

Disclosure: Author is long GM

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