UAW Walks Away From GM Concession Talks

Breakdown With Union Comes As Automaker Faces Tuesday Deadline To Prove Viability To Gov't

(AP)  Negotiators for the United Auto Workers walked out of concession talks with General Motors Corp. Friday night in a dispute over payments to a union-administered retiree health care fund, a person briefed on the talks said Saturday.

The breakdown comes at a critical time as GM races against a Tuesday deadline to submit a plan to the government showing how it can become viable.

The Detroit-based auto giant is living on $9.4 billion in government loans, and the Treasury Department must approve its viability plan for GM to get $4 billion more. Chrysler LLC, which has received $4 billion in government loans and wants an additional $3 billion, faces the same deadline.

At GM, UAW negotiators walked away because the company made demands that were "detrimental to retirees and the ability to provide health care," according to the person, who asked not to be identified because the talks are private.

Under terms of the loans to GM and Chrysler laid down by the Bush Administration, both companies must gain concessions from unions and debtholders. Among targets for concessions is GM's cash contribution to a trust fund that will take over the obligation for retiree health care starting next year.

GM says it owes $20.4 billion to the fund, and the loan terms set a target of giving the union half of the value in cash and half in GM stock. The trust fund would take over health care payments for GM's roughly 500,000 blue-collar retirees and spouses starting Jan. 1, 2010.

The trust, called a voluntary employees beneficiary association, would let GM move about $46.7 billion in retiree health care costs off its books, making it more cost-competitive with Asian automakers. It is the key feature of a new four-year contract signed in 2007 with the UAW.

The union has said that if fully funded, the trust would provide health care to retirees for 80 years.

GM also must reduce its public unsecured debt by two-thirds and has been negotiating with bondholders to swap the debt for equity. The company said in a Jan. 15 presentation to analysts that it has $41.6 billion in debt.

GM, Chrysler and their unions must also agree to reduce the companies' labor costs so they are competitive with Japanese automakers that have plants in the U.S.

GM has said its total per-employee labor costs, including wages, pensions, benefits and retiree costs, are now $69 per hour. Toyota Motor Corp., GM's biggest competitor, says its hourly costs are $53. GM's costs will drop to $62 once the retiree health care trust takes effect, the company has said.

[bobnjersey]

[They all want to keep their $60/hr job poppin rivets. The same job that the Japanese or Mexicans do for 20. ]
[Posted by used2bfedup1 at 02:37 PM : Feb 16, 2009]

where are you getting your incorrect information? you shold look eleswhere.

these three sentences were the last three of the story ... only about a couple inches above your post. it was right there ... but you missed it ... isn''t that strange?

"GM has said its total per-employee labor costs, including wages, pensions, benefits and retiree costs, are now $69 per hour. Toyota Motor Corp., GM''s biggest competitor, says its hourly costs are $53. GM''s costs will drop to $62 once the retiree health care trust takes effect, the company has said".

[used2bfedup1]

They all want to keep their $60/hr job poppin rivets.

The same job that the Japanese or Mexicans do for 20.

[bobnjersey]

[i hear walmart has great prices too.
(Posted by bobnjersey)

Where do you think all the UAW workers buy their stuff? ]
[Posted by thgdriver1 at 01:29 PM : Feb 16, 2009]

actually ... all those involved in the making of your lexus hope that someday they''ll be able to afford to shop there.

you don''t have one of those ''god bless america'' stickers on the bumper of that lexus ... do ya?

[win4usa]

No bailouts ("loans") for anyone. The tax payers shouldn''t be responsible to fix your financial mistakes.

[thgdriver1]

i hear walmart has great prices too.

Posted by bobnjersey

Where do you think all the UAW workers buy their stuff?

[thgdriver1]

GM''s cash contribution to a trust fund that will take over the obligation for retiree health care.

I know a lot of retired people, All, and I do mean all, have to pay for their own health care insurance. When I retire I will have to pay my own way also. WHO THE heLL DO THE UAW THINK THEY ARE??!! Better then me? Better then my friends and associates? I think NOT!!

[bobnjersey]

[The Lexus? I could not latch the hood after checking under it one day. The dealer sent a service tech. out to my home and adjusted it that very day. Case closed on Detroit.]
[Posted by thgdriver1 at 12:56 PM : Feb 16, 2009]

it''s good to see that you''re looking out for yourself ... who''s gonna if you don''t ... it''s the new american way!

i hear walmart has great prices too.

[thgdriver1]

For all you whiners that buy junk and take it up the chocolate highway to support spoiled UAW workers I say --To each his own.

The Lexus dealership is close to my home, it was built by American workers/contractors, the sales department, office, service department, body shop all employ my neighbors.

[thgdriver1]

Hey Boobinjersey----Guess what auto was back for repairs the first 3 years of ownership?

That''''s right, the Mountaineer. Including a noisy differential that they had to replace, cruse control inop, electric drivers seat that would not move, stalling at idle, ETC. Had to make appointments for all repairs except stalling prob. It was towed that time.

The Lexus? I could not latch the hood after checking under it one day. The dealer sent a service tech. out to my home and adjusted it that very day. Case closed on Detroit.

[bobnjersey]

[Concessions will have to come or the UAW is gone at GM. Notice Ford didn''''t take any money.]
[Posted by platteman at 10:24 AM : Feb 16, 2009]

yes it was noticed ... and they too have the uaw.

so ... it''s the union''s fault?

[bobnjersey]

[You can build cars till heLL freezes over, if nobody can afford them, who are you going to sell them to? ]
[Posted by thgdriver1 at 12:32 PM : Feb 16, 2009]

working americans who see it as important to support american business will buy american cars.

[thgdriver1]

Posted by newster1

I assumed you can read and comprehend English. Obviously you missed the point of my post. I pointed out that the foreign make held it''s value longer to the tune of 4,000 dollars. Although they listed about the same new. Plus the fact that quality was far and away better in the foreign car.

[sirmarion-2009]

UAW...Useless And Wasteful...If they want no concessions let them go bankrupt,and see what they get than. Its better to get some than none,but I guess if your Union knows best?

[thgdriver1]

I own two autos one is a 2003 Mountaineer, it listed for over 38,000.00 New. I admit I did not pay list price.

The other is a 2003 Lexus, it listed for over 37,500.00 new. I did not pay list price.

I was going to purchase a new Auto last month. Guess what vehicle is worth more in trade right now?

That''s right, the Lexus, 11,750.00

They only wanted to give me 7,800.00 for the Mountaineer.

Guess what make I will probably purchase In the spring? That''s right, a Lexus.

[thgdriver1]

It''s clear the UAW members think Nobama will still save their overpaid aiss''s because they all voted Democrat back in November. GM will probably still get the loans but when that runs out, then what?

You can build cars till heLL freezes over, if nobody can afford them, who are you going to sell them to?

[irmcvet971]

the UAW is cutting it''''s own throut, let them !!!!

Posted by republiscums at 12:02 PM : Feb 16, 2009

If THEY do not stand up for the Retired Worker here who will. I say great for them! In a time when it has been fashionable to just trash people and all they have worked for, finally people are beginning to understand. GM can''t survive without these folks and they aren''t going to just toss their retirees on the scrap heap.

[gowens1]

the UAW is cutting it''s own throut, let them !!!!

[whitemale09]

Say goodbye to the last ''middle-class'' wages on earth.

Union bashers are like a ''sow to the slaughter''.

They can''t see fascism if it was taped in front of their eyes.

The British is so skilled at ''divide in conquer'' by pitting labor vs. management and yet none of these Wall Street Republicans give a d*mn.

The bailout was for hedge fund and buy-out-firm Cerebrus Capital LLC to turn around and use that money to ''buy-out'' both GM and Chrysler after inevitable bankruptcy.

That was the British plot all along; to hire back former UAW employees at Wal Mart wages and tell the little serfs to go look to Government for health care.

Meanwhile government is trying to come up with ''cost-effective'' ways to bring universal health care but they know they will need eugenisists and celebrities to promote ''die for the sake of mother nature'' campaigns.

British Malthus Club of Rome garbage rears its ugly head.

[deletedid]

GM & GOV want to pay the INDUSTRY - NOT the workers!!!

[platteman]

Look at CA. The reason they are so far in debt is that Arnold caved to the Unions and they got all they wanted. Now CA is sending IOU''s to taxpayers.
Concessions will have to come or the UAW is gone at GM.
Notice Ford didn''t take any money.