AP source: UAW walks away from GM concession talks
02-14-2009, 04:22 PM
#1
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Join Date: 06-01-2008
Location: Missouri
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AP source: UAW walks away from GM concession talks
DETROIT (AP) — A person briefed on concession talks between the United Auto Workers and General Motors Corp. says union negotiators walked away from the bargaining table Friday night.
The person says the talks broke off when the company made proposals that the UAW considers detrimental to providing health care to retirees. He asked not to be identified because the talks are private.
The person said no new talks have been scheduled.
The breakdown comes at a critical time, just four days before GM is to submit a plan to the government to prove it can become viable and justify its government loans.
GM has received $9.4 billion in loans thus far and can get $4 billion more if the Treasury Department approves its plan.
The person says the talks broke off when the company made proposals that the UAW considers detrimental to providing health care to retirees. He asked not to be identified because the talks are private.
The person said no new talks have been scheduled.
The breakdown comes at a critical time, just four days before GM is to submit a plan to the government to prove it can become viable and justify its government loans.
GM has received $9.4 billion in loans thus far and can get $4 billion more if the Treasury Department approves its plan.
02-14-2009, 04:30 PM
#2
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Join Date: 11-27-2007
Location: Austin, Texas
Posts: 1,115
According to Wall Street Journal article, bankruptcy is now a very real option for GM. They would come out of it as a new company essentially. The union walking away may very likely have cinched it, certainly at a minimum increased the odds greatly. We may know as soon as Tuesday.
02-14-2009, 05:45 PM
#4
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Join Date: 06-29-2008
Location: Crystal Lake
Posts: 839
UAW is a Joke!!
DETROIT – 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.
GM spokesman Tony Sapienza would say only that GM is working on its viability plan.
"We're committing to meeting the goal of providing a plan as required by terms of the restructuring plan," he said Saturday.
A spokesman for the UAW did not immediately respond to a request for comment.
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.
, Maybe its time to tell UAW to go to Hell. There's enough unemployed people out there that can replace anyone that has a Issue with trying to save the Auto Maker and More Hardship on the Economy.
Wonder if UAW will be there if and When GM Falls. Doubt It.
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.
GM spokesman Tony Sapienza would say only that GM is working on its viability plan.
"We're committing to meeting the goal of providing a plan as required by terms of the restructuring plan," he said Saturday.
A spokesman for the UAW did not immediately respond to a request for comment.
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.
, Maybe its time to tell UAW to go to Hell. There's enough unemployed people out there that can replace anyone that has a Issue with trying to save the Auto Maker and More Hardship on the Economy.Wonder if UAW will be there if and When GM Falls. Doubt It.
02-14-2009, 08:40 PM
#5
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Join Date: 10-24-2006
Location: The Show-Me State
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The UAW is playing the Obama card. When the Bush administration set out the terms of the loans, they specifically directed the UAW to make every effort to agree to concessions as part of getting the loans. The UAW prez at the time declared that he didn't care what Bush said or conditions he put in the loans, he knew Obama would back the union up later. Now we'll see if Obama will really stand up for a "special interest group" that gave a substantial amount of money to his campaign.
Problem for him is, I think Victory is right considering that millions of people are out of work and would gladly take ANY job right now. We're back to 1931 where people are out of work and the first strikes were met with much disdain by the general public.
Problem for him is, I think Victory is right considering that millions of people are out of work and would gladly take ANY job right now. We're back to 1931 where people are out of work and the first strikes were met with much disdain by the general public.
02-14-2009, 09:37 PM
#6
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Join Date: 06-29-2008
Location: Crystal Lake
Posts: 839
Wonder if UAW is looking at the bigger picture. If GM doesn't get anymore cash and are unable to survive. Along with GM Going Bankrupt so does UAW.
Regardless i already gave my opinion. It would be a Horrible few months but in the end. People that Currently have no job will fill the Spots quickly and for NORMAL Benefits and Decent Pay.
This is not the time for any Union to play God. Unions are were,our needed when companies aren't looking out for the little people, but when they get too powerful and start thinking that they can do what they want. Then the Company starts Struggling and there still stuck in there ways. Then the Company Fails. Then its so much for thinking of the little people.
Time's are different and its time to look at the big picture. Currently every 1 out of every 10 Homeowner's is in either going though Pre-Foreclosure or In Foreclosure.
Regardless i already gave my opinion. It would be a Horrible few months but in the end. People that Currently have no job will fill the Spots quickly and for NORMAL Benefits and Decent Pay.
This is not the time for any Union to play God. Unions are were,our needed when companies aren't looking out for the little people, but when they get too powerful and start thinking that they can do what they want. Then the Company starts Struggling and there still stuck in there ways. Then the Company Fails. Then its so much for thinking of the little people.
Time's are different and its time to look at the big picture. Currently every 1 out of every 10 Homeowner's is in either going though Pre-Foreclosure or In Foreclosure.
02-15-2009, 01:24 PM
#8
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Join Date: 11-11-2007
Location: Sheboygan WI
Posts: 364
Chrysler I think may be just about done for, given the latest data appearing about global warming doesn't bode well for a company whose sales are dominated by not very efficient large vehicles, and their small vehicles aren't up to par. Even the small Jeeps aren't selling well, the Belvidere assembly plant near here seems to have been shut more time than operating so far this year. At least GM and Ford have a reasonable small/midsized range, even if they can't make money on them at the moment. I'm sure there's an ongoing market for full size pickups, but people who need them are far fewer than those who had bought them in recent years (me included) with little real need.
02-15-2009, 03:29 PM
#9
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Join Date: 10-24-2006
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The problem with Chrysler is DCX completely destroyed that company. They were the most profitable auto manufacturer in the WORLD before DCX was formed. It didn't really matter that they didn't sell as many as GM or Ford or that their quality wasn't the greatest. They built an affordable range of cars that made MONEY. That was the beauty of Lee Iacocca's management style. Build a product line that covers 99% of the market, sell it cheap, and profit!
Just out of curiosity, I went by the local Dodge dealership after church to look at the three Challenger SRT8's they had. WTF are they thinking? A ponycar for $45,000? I can buy a new Corvette for that much money, or a new Camaro SS for $32,000! That car is NOT worth the scratch that a Cadillac CTS commands, even with a Hemi. If Iacocca was still running that company, that car wouldn't have been a penny over $25k with the V8.
Then again, if Iacocca was still running that company, Challenger wouldn't exist. But the Neon and LH sedans would still be around.
Just out of curiosity, I went by the local Dodge dealership after church to look at the three Challenger SRT8's they had. WTF are they thinking? A ponycar for $45,000? I can buy a new Corvette for that much money, or a new Camaro SS for $32,000! That car is NOT worth the scratch that a Cadillac CTS commands, even with a Hemi. If Iacocca was still running that company, that car wouldn't have been a penny over $25k with the V8.
Then again, if Iacocca was still running that company, Challenger wouldn't exist. But the Neon and LH sedans would still be around.
02-16-2009, 07:27 AM
#10
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Join Date: 04-10-2008
Location: Stone Mountain, GA
Posts: 89
Here in GA, a company is building a plant to supply metal stampings for the soon to be opened Kia plant. The metal plant has 600 jobs available at $10 per hour, plus healthcare.
They got 3000 applications in 4 days.
The UAW have priced themselves out of the market.
They got 3000 applications in 4 days.
The UAW have priced themselves out of the market.