GM starts seeking concessions from UAW, bondholders

[RACER X]

"The UAW's near-stranglehold on the domestic auto industry has taken a lot of the blame for the current condition of the carmakers. Whether it's a fair conclusion or not, however, for companies like General Motors to survive, there will have to be concessions from labor and investors alike. Formal concessions negotiations with a range of partners begin this week, with the spotlight on the UAW.

Delving into the UAW's labor contracts will be a hard-fought issue, however, as the union is expected to resist at every turn. The contract negotiated in 2007 is still in effect, and to achieve the changes GM must have to ensure future sustainability, the contract will have to change. Up to 31,000 jobs will go, reports The Detroit News, along with nine plant closures.

A number of conditions built into the loans granted by the Bush Administration at the end of December include stipulations that would reduce wages to levels competitive with non-union foreign carmakers by 2009 and require the UAW to accept stock in the place of half the cash payments made to its health care trust fund by 2010.

Further concessions from the UAW, such as wage cuts or reductions in benefits packages are also being sought. UAW President Ron Gettelfinger thinks the Bush loan package unfairly targets the union as the primary vehicle for cutbacks, and hopes Barack Obama will change things when he takes office later this month.

All Content Copyright 2006-2008 Motor Authority "

http://www.motorauthority.com/gm-sta...ndholders.html