GM & UAW working towards 2/17 deadline

[Purple Penelope]

GM Working Toward Feb. 17 Deadline On Labor Deal

January 07, 2009: 05:25 PM ET

DETROIT -(Dow Jones)- General Motors Corp. (GM) said Wednesday it needs to have key elements of a cost-cutting labor deal with the United Auto Workers in place by Feb. 17 to comply with last month's $17.4 billion federal bailout.

GM and Chrysler LLC are required to get their labor costs in line with the U.S. operations of foreign-based competitors under terms of the low-interest loans from the Bush administration to avoid bankruptcy. Ford Motor Co. (F) didn't ask for funding but is expected to push for the same concessions granted to its rivals.

The deadline gives Detroit's auto makers and the union less than six weeks to negotiate changes to the four-year labor agreement reached in 2007 after short strikes against GM and Chrysler.

While the loan deal gives GM and Chrysler until March 31 to finalize changes to the labor contract and get them approved by UAW members, the companies are required to present key elements on Feb. 17.

GM spokesman Tony Sapienza said under the deal the companies at that time must present plans to alter worker severance pay, compensation and work rules that govern the factory floor.

"We are working toward meeting that deadline," he said Wednesday.

Chrysler spokeswoman Mary Beth Halprin declined to comment on the deadline.

"Discussions with our constituents have continued since we submitted our plan to the government on Dec. 2," she said.

The auto companies may be hard-pressed to cut a final deal by Feb. 17, given the complexity of issues involved in negotiations, according to sources familiar with negotiations who asked not to be identified because the talks are private.

In addition to reducing labor costs, the union and auto makers must alter an agreement under which the union is to assume responsibility for retiree medical benefits. Instead of making contributions to the fund in cash, the companies can make the payments half in cash and half in stock.

UAW leaders arrived this week in Detroit and began internal meetings to prepare for negotiations.

But even as top bargaining officials convened on Wednesday, key aspects of the deal remained unclear. Detroit's auto makers and the United Auto Workers are scrambling to decipher the federal mandate requiring labor cost reductions under as the two sides prepare to launch a critical round of labor talks.

The UAW, meantime, wants more clarity as to what it means to be "competitive" with companies such as Toyota Motor Corp. (TM). UAW President Ron Gettelfinger he plans to work with the administration of President-elect Barack Obama, who takes office Jan. 20, to have the wage and benefit demands removed.

Union negotiators met as a group on Tuesday in Detroit and were planning to convene again on Wednesday, according to people familiar with the negotiations said.

GM shares closed Wednesday up 19 cents, or 4.8%, to $4.13 but in recent late trading shares are down to $4.10.

-By Sharon Terlep, Dow Jones Newswires; sharon.terlep@ dowjones.com

[1luckydog]

I got a feeling Chrysler is going to take the money & run.

Seems the main focus is on GM.
I don't see anything wrong w/ accepting stock as part of compensation. It will challenge the employee's belief in the company. They will think of their own survival, next time they have ideas of buying a foreign label auto.

On the other side. I still have a bad feeling about this whole deal. Seems like GM is being prepared to SHOW viability, until a foreign(SAIC) interest can buy them out. Foreign interests just want the name & customer base that goes along with a company.

Not stopping there. Obama wants to print more & more money. This will de-value the dollar worldwide.
The "Eurodollar" is still moving. Last I seen it was 27% of world currency, consisting of about 40 countries.
As ours loses, another gains. This will make more countries beg to become part of another currency base.

Look at the last 1000 or so years of mankind. Kings, Czars, etc...Not a whole lot of progress until the U.S. became a nation. Free thinking, free from tyrany, free to do the things we desire most. Other nations have built their advances from our model.
Now...230 years later we are being RULED by a greedy capitalistic society of a few.

Taking away my speculation & personal feelings. Going back to Obama's ba-zillion dollar spending spree. I just don't see how any company can SHOW viability in a country with a declining dollar.

JTR