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GM, UAW talks heat up; union frets about China imports

GM, UAW talks heat up; union frets about China imports

Automotive News | May 18, 2009 – 9:00 am EST


DETROIT (Reuters) — The UAW expects a crucial round of restructuring talks with General Motors "to intensify this coming week" ahead of an end-of-May deadline set by the Obama administration.

In an e-mail message sent to rank-and-file workers, the union also repeated its opposition to GM’s plans to close 16 U.S. manufacturing plants and cut about 21,000 jobs while also planning to increase vehicle imports from GM plants in lower-wage economies such as Mexico, South Korea and China.

"The UAW is actively involved in these complex negotiations, which involve the Obama auto task force, GM management, bondholders and secured lenders, dealers, parts suppliers and other stakeholders," the union said in the message. "These negotiations will have a major impact on wages, benefits and jobs for active and retired UAW members.

"We are expecting the restructuring negotiations to intensify this coming week."

GM plans to begin importing Chinese-made cars to the United States in 2011 and boost 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.

Gettelfinger, Henderson in Washington

The unusual e-mail message to UAW-represented workers comes as UAW President Ron Gettelfinger and GM CEO Fritz Henderson are both due in Washington today for talks with U.S. officials.

Those discussions have a growing urgency because GM faces a deadline to restructure its debt, including health care related obligations to the UAW, by the end of the month ahead of a bankruptcy filing that the automaker says is now probable.

GM has a $1 billion bond payment due June 1 and must complete debt restructuring talks by then or file for bankruptcy, executives have said.

GM is operating with $15.4 billion in federal loans and would be majority owned by the U.S. government under the terms of the reorganization it has proposed to the Obama administration.

In its e-mail message to members sent late Sunday, UAW leadership urged auto workers and retirees to write to President Barack Obama and ask him to dictate job-saving changes to GM’s restructuring plan.

The union campaigned for Obama during last year’s election, and the White House-appointed auto task force being steered by former investment banker Steve Rattner has shown special consideration for the union’s position in the reorganization of GM’s smaller rival, Chrysler LLC.

Seeking concessions

GM needs to win concessionary agreements from the UAW to reduce factory operating costs and to halve the debt owed to a trust fund aligned with the union in order to match deals already approved for UAW-represented workers at Chrysler and Ford Motor Co.

In exchange for foregoing about $10 billion in cash payments owed to the UAW’s health care trust, GM has proposed giving the union a 39 percent stake in the reorganized company.

But the UAW has stepped up its opposition to GM’s plans for operating its restructured business over the past several weeks and has tried to enlist Democratic lawmakers to put pressure on the administration to force changes.

In one element of the automaker’s restructuring plan that has attracted criticism from the union, GM has said it would look to import smaller vehicles built in joint-venture factories it operates in China to the U.S. market.

Chrysler, by contrast, plans to build a new small car in a U.S. plant. The No. 3 U.S. automaker, which like GM is shedding costs and dealers, plans to emerge from bankruptcy under the management control of Italy’s Fiat S.p.A.

“We need President Obama and his auto task force to stand up for the interests of American workers and retirees in the restructuring negotiations," the UAW said in its e-mail message.

"Tell him to insist that GM must change its restructuring plan. If GM is going to receive government assistance to facilitate its restructuring, along with the tremendous sacrifices by UAW active and retired members, it should be required to maintain the maximum number of jobs in the U.S. instead of outsourcing more production to foreign countries," the message said.

  UAW President Ron Gettelfinger (shown) and GM CEO Fritz Henderson are both due in Washington today for talks with U.S. officials.


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