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GM, UAW talks said to focus on plans for Chinese imports

GM, UAW talks said to focus on plans for Chinese imports

Automotive News | May 16, 2009 – 9:00 am EST


DETROIT (Reuters) — Talks between General Motors and the UAW have intensified in recent days as they focus on the automaker’s plans to cut 21,000 U.S. factory jobs and shift production outside the United States, people briefed on the discussions said.

The UAW has been campaigning to block GM’s restructuring plan on the grounds that it would cut domestic car production and jobs while increasing imports of GM-badged vehicles from the low-wage economies of China, Mexico and South Korea.

The union on Friday renewed a call for the Obama administration and Congress to force changes in the GM plan.

UAW President Ron Gettelfinger and GM CEO Fritz Henderson will be in Washington next week for meetings expected to include discussion of GM’s future production plans, one of the roadblocks to negotiations crucial to meeting a government-imposed June 1 deadline for the automaker.

GM plans to begin importing Chinese-made cars to the United States in 2011 and increase the volume to more than 51,000 in 2014, a planning document circulated by GM among U.S. lawmakers shows. The document also reveals plans to sharply increase sales of cars it makes in Mexico and South Korea while reducing the number made in Canada.

GM and the UAW resumed negotiations earlier this month after the union ratified cost-savings deals for smaller rival Chrysler, according to one of the people briefed on the talks, who asked not to be identified because the discussions are continuing.

Sensitive issue

The issue of U.S. job losses is sensitive for GM, which has been kept afloat with $15.4 billion in federal loans and has proposed giving the union and the U.S. Treasury a combined 89 percent stake in a restructured company.

"If GM is going to receive government assistance to facilitate its restructuring … we believe it should be required to maintain the maximum number of jobs in the United States," the union’s lobbyist, Alan Reuther, said in an open letter sent to members of Congress on Friday.

GM burned through $10 billion in the first quarter and has said bankruptcy by June is probable as it tries to slash $27 billion in bond debt and cut up to 40 percent of U.S. dealerships.

Henderson said this week he was willing to take up the issue of GM’s production plans in negotiations with the UAW.

GM’s current plans under the restructuring blueprint developed under the direction of the Obama administration’s autos task force includes the assumption that GM’s imports to the U.S. market will nearly double by 2014.

We need to keep jobs

U.S. Rep. Gary Peters of Michigan said on Thursday that Chrysler LLC through its alliance with Fiat S.p.A. and Ford Motor Co were both planning to build small cars in the United States.

"General Motors can do it as well," Peters said. "We have to keep as many jobs as possible as we go through this restructuring."

Sen. Sherrod Brown, an Ohio Democrat, sent a letter to Treasury Secretary Timothy Geithner on Friday to force GM to make lower-margin subcompacts in the United States rather than import them from China as a condition of receiving new aid.

"Given the number of auto manufacturing layoffs in my state, and the sacrifices auto workers and their families continue to make to facilitate the restructuring of GM, I do not see how the American people can be expected to provide taxpayer funds to the company while GM is offshoring production of its vehicles," Brown said.

GM declined to comment on the talks.

GM and the UAW have already reached agreement on other key issues, including changes to the way factories are run that are intended to reduce hourly compensation costs.

GM has said it expects to halve its remaining cash outlays for retiree health costs to about $10 billion in exchange for giving a union-affiliated trust fund a 39 percent stake in the reorganized company.

Ford and Chrysler have already reached similar deals.

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