Sunday, February 15, 2009

GM and Chysler News:Union turns to Ford after GM and Chrysler talks stall

SOUTHFIELD, Michigan: Ford Motor became the focus of United Automobile Workers union negotiations over the weekend after talks with General Motors and Chrysler stalled.

The union objected to GM and Chrysler proposals to modify a retiree health care fund that Alan Reuther, a UAW lobbyist, said went beyond the requirements of the U.S. Treasury loans that the two automakers were relying on to survive. The U.S. government requires signed preliminary labor agreements by Tuesday, though it has not said what the consequences would be for missing the deadline.

Ford was continuing to talk with the union, said a company spokesman, Mark Truby, who declined to characterize the talks.

Harley Shaiken, a labor professor for the University of California at Berkeley, said, "What this reflects is that the UAW has a better relationship with Ford and feels that an agreement that suits both sides can be reached and can then be spread to the other automakers."

The terms of the Dec. 19 loan agreements from the U.S. Treasury require GM and Chrysler to persuade the UAW to accept half of scheduled payments into a union-run retiree health care fund next year in equity instead of cash. The automakers are also seeking to eliminate supplemental unemployment pay and to change plant work rules to trim labor expenses.

Ford had said it expected to receive whatever concessions the UAW granted GM and Chrysler, and Ron Gettelfinger, the union's president, said last month that Ford would likely get similar concessions.

The GM and Chrysler proposals on the Voluntary Employee Beneficiary Association "contradict the explicit terms of the Treasury loan agreements, and would severely hurt retirees," Reuther said in an e-mail message. "These proposals are a non-starter as far as the UAW is concerned."

In GM's case, the union must sign off on a cash contribution of $10.2 billion to the fund instead of $20.4 billion, GM said last month. The UAW already agreed to accept reduced cash payments into the health care fund, which was established under the 2007 contract that let automakers pay new workers half as much as traditional union employees.

Gettelfinger said in 2007 that the union was confident the fund could pay the health care benefits of retirees for the next 80 years. He has said he is willing to make additional sacrifices to help the automakers avoid bankruptcy if auto executives, debt holders and others also sacrifice.

Lori McTavish, a Chrysler spokeswoman, and Tony Sapienza, a GM spokesman, declined to comment over the weekend on the status of the talks. Sapienza said Friday that GM was committed to meeting the Tuesday deadline. Chrysler, 80.1 percent of which is owned by Cerberus Capital Management, said it also planned to meet the deadline.

The automakers are also asking the union to end a 54-year-old benefit that ensures almost full pay during layoffs.

The so-called "supplemental unemployment benefit" gives laid-off workers most of their take-home wages. Automakers and the UAW were discussing the future of the program, said people with knowledge of the talks, who asked not to be identified because the negotiations were private. The UAW was not negotiating cuts in core wages or benefits, the people said.

If GM cannot win agreement from the UAW and creditors to reduce its debt, analysts say the administration of President Barack Obama will face a politically tough choice: either pump billions of dollars more into GM or steer it toward bankruptcy as some critics of the bailout have urged. Under Rick Wagoner, its chief executive, GM has resisted suggestions that it would be better able to restructure under a court-supervised bankruptcy. Wagoner has argued that consumers would shun GM cars and trucks if it were in bankruptcy, sending already weak sales into an irreversible tailspin.

Gettelfinger has balked at saddling retired workers with additional risk by taking devalued GM stock instead of cash. GM has received $9.4 billion from the U.S. government and has been pledged another $4 billion if it can show it can be viable at a time when U.S. auto sales are near 30-year lows.

A bankruptcy filing would allow GM to rework its contracts with creditors, the UAW, dealers and its suppliers. But it would also mean even steeper job losses. GM, Chrysler and Ford have cut 250,000 jobs since the start of the decade and are looking to cut more. GM and Chrysler are offering buyouts for most of their 91,000 UAW workers.

Chrysler has been given $4 billion in emergency financing from the U.S. Treasury and is seeking an additional $3 billion.

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