Talks between General Motors Corp and the United Auto Workers resumed on Sunday, just two days before a deadline for the struggling automaker to submit a new restructuring plan to the U.S. government.
Union negotiators in Detroit walked away from the bargaining table on Friday over differences with GM over the central issue of how to fund retiree health-care costs.
Negotiating teams met on Sunday, according to a person briefed on the situation, although it was unclear if any agreement could be reached by the deadline.
Meanwhile, GM and a committee of its bondholders were locked in high-stake talks aimed at reducing debt at the struggling automaker by about $18 billion.
GM spokesman Steve Harris said the automaker's board would convene on a conference call on Monday to review a draft of the restructuring plan although work on it was likely to continue right up until the deadline for submission.
If GM cannot win deals to cut its debt and costs, the automaker would be left reliant on an expanded bailout from the Obama administration or forced to consider bankruptcy.
GM and Chrysler LLC, are required to submit new turnaround plans by Tuesday showing how they can be made viable after receiving $13.4 billion in emergency aid.
Both automakers say they expect to meet cost-cutting targets set out under the bailout, which include making blue-collar labor costs competitive with Japanese automakers that operate factories in the Untied States.
UAW representatives could not be reached for comment.
Like bondholders, the UAW is being pressed to accept stock in a recapitalized GM in exchange for debt. The UAW is owed some $20 billion from GM for a health-care fund. It faces pressure to take half of that in equity in a recapitalized GM.
GM and the UAW agreed to create the retiree health-care fund as part of a landmark 2007 labor agreement. But the steep slide in auto sales in 2008 left GM unable to survive without federal loans and unable to fund its commitment to the union.
In recent weeks, GM's leaders have become more open to a bankruptcy filing if there is some assurance it would not be a protracted process, a person involved in the talks has said.
The U.S. government has already hired advisers to consider how it could fund such a bankruptcy, people involved in that work have said.
A bankruptcy filing would allow GM to rework its contracts with creditors, workers, dealers and its suppliers. But it would also mean even steeper job losses. GM, Chrysler and Ford Motor Co have cut 250,000 jobs since the start of the decade and are looking to cut more.
The UAW campaigned for Obama and some autoworkers said they hoped the new administration would soften the auto loan terms imposed by former President George W. Bush.
Sunday, February 15, 2009
GM, UAW Resume Negotiating
These negotiations may be some of the most momentous discussions to take place in the history of collective bargaining. It is fascinating, and almost nerve wracking to observe.
Posted by Michael on Sunday, February 15, 2009