GM ‘open’ to union concerns, CEO says

Wednesday, May 6, 2009

GM ‘open’ to union concerns, CEO says

Gordon Trowbridge / Detroit News Washington Bureau

Washington — General Motors Corp. boss Fritz Henderson said Tuesday the company is open to modifying planned production cutbacks when it meets with union negotiators this week.

"I think we have to be open to what their concerns are," CEO Henderson said between meetings with lawmakers.

The olive branch was extended as the United Auto Workers fired off a letter to senators, complaining about GM’s most recent restructuring proposal.

The automaker said last month it would cut production and jobs deeper than previously planned under a proposal designed to satisfy the Obama administration. The White House, which is considering additional aid to GM, was concerned that its earlier restructuring proposal was not aggressive enough.

GM and the union are to begin negotiations this week on the production and job cuts and other issues, including the company’s obligations to a UAW-run fund for retiree health care.

Henderson did not offer specifics for what the company might modify. But he said he did not consider any issue off the table in talks with the union.

He repeated that message in a later meeting with Michigan members of Congress, said Rep. Sander Levin, D-Royal Oak.

Levin said Henderson told lawmakers "no final decisions have been made," and that plant closings and job cuts are subject to negotiation with the UAW.

In the letter to senators Tuesday, the UAW objected to the automaker’s revised restructuring plan, and urged them to oppose it as well.

"Unfortunately, the latest restructuring plan put forward by the company calls for the closing of 16 manufacturing facilities in this country, including four assembly plants," UAW legislative director Alan Reuther said in the letter.

"This will result in the direct loss of 21,000 jobs. The ripple effect at suppliers, dealers, and other businesses will cost tens of thousands of additional jobs, devastating numerous communities."

Between 2010-14, Reuther said, GM’s restructuring plan calls for a 98-percent increase in the number of vehicles it will import from Mexico, Korea, Japan and China. That’s the equivalent, he said, of the production of four plants — "the same number that GM plans to close in the United States."

Reuther said the UAW "recognizes that GM needs to ‘right-size’ its production in the U.S."

But, he said, "we believe it should have an obligation to build in this country the vehicles it will be selling in the U.S. market, thereby maintaining the maximum number of jobs in the United States.

"GM should not be taking taxpayers’ money simply to finance the outsourcing of jobs to other countries," Reuther said.

The UAW and its supporters are planning a bus tour of Michigan and other states next week to drive home their objections to GM’s restructuring plans. Other sponsors include the United Steelworkers and Alliance for American Manufacturing.

Also Tuesday, GM said it may offer current shareholders a reverse stock split that would give them one share of new stock for every 100 shares they own.

The automaker said in a filing with the Securities and Exchange Commission that the deal would be part of an agreement with the Treasury Department to swap at least half of GM’s debt to the government for company shares.

Both sides are still negotiating the terms of the debt swap, but the government would own at least 50 percent of the company.

GM has received $15.4 billion in government loans and faces a June 1 deadline to restructure or be forced into Chapter 11 bankruptcy protection.

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