GM, union at odds as bankruptcy deadline looms

By AFP

July 15, 2010 Updated May 16, 2009 at 2:01 AM CDT

General Motors remains at odds with its main union over key contract changes as a deadline to prove viability and avert bankruptcy fast approaches, union officials said.

The United Auto Workers union objects to GM's plans to shut down more US plants and import as many as 50,000 vehicles from China.

"If GM is going to receive government assistance to facilitate its restructuring, along with substantial benefits from the tremendous sacrifices by UAW active and retired members and other stakeholders, we believe it should be required to maintain the maximum number of jobs in the US, instead of outsourcing more production to countries where the vehicles will have little or no US content," UAW legislative director Alan Reuther wrote in a letter distributed to lawmakers Friday.

The struggling automaker also faces steep opposition from dealers after announcing plans Friday to shrink its dealer network 40 percent, cutting some 2,300 sales outlets by the end of 2010 from the current level of 5,969.

It must also reach an agreement with bondholders to slash its massive debt-load with an equity swap.

GM is funding its operations with more than 15 billion dollars in emergency government loans and faces a June 1 deadline to complete a major restructuring plan or be forced to follow its rival Chrysler into bankruptcy court.

GM's chief executive officer Fritz Henderson acknowledged earlier this week that a bankruptcy filing is the "more probable" outcome "given the objectives that we've set for ourselves."

The automaker announced it would move up payments to suppliers to May 28 from June 2 specifically so the money could not get tied up in a bankruptcy filing.

UAW spokesman Roger Kerson declined to comment on reports that GM wants to cut as many as 21,000 additional blue-collar jobs in the next phase of its restructuring in order to reduce costs by as much one billion dollars.

GM has already announced plans to slash 26,000 union jobs and the fresh cuts would mean its hourly workforce would be more than halved to about 42,000 from 87,000 in the spring of 2008.

GM declined to comment on the status of negotiations.

GM's plans to import up to a third of the vehicles it sells in the United States by 2014 will mean the US government has spent billions of dollars to lose jobs instead of protect them, said Harley Shaiken, a labor expert from University of California-Berkley.

"GM has tended to be tone deaf on the political implications of these kind of decisions," Shaiken told AFP.

"The Auto Task Force also tends to a little tone deaf as well... A large part of their approach tends to be at cross purposes with the stimulus package."

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