UAW to renegotiate labor terms, suspend jobs bank

DETROIT – The United Auto Workers said Wednesday it is willing to change its contracts with U.S. automakers and accept delayed payments of billions of dollars to a union-run health care trust to do its part to help the struggling companies secure $34 billion in government loans.

United Auto Workers President Ron Gettelfinger said the union will suspend the jobs bank, in which laid-off workers are paid up to 95 percent of their salaries while not working, but he did not give specifics or a timetable of when the program will end.

"We're going to sit down and work out the mechanics," Gettelfinger said at a news conference after meeting with local union officials. "We're a little unclear on some of the issues."

Members of Congress criticized the automakers last month for paying workers who are not on the job. About 3,500 auto workers across the three companies are currently in jobs bank programs.

One local union member who was in the meeting said the changes to the jobs bank would nearly eliminate the program. The member asked not to be identified because the details had not been made public.

Gettelfinger stopped short of saying the union would reopen contract talks with General Motors Corp., Chrysler LLC and Ford Motor Co. but said it would be willing to return to the bargaining table to change some terms.

Talks with GM will begin immediately, but additional bargaining officials must be elected for Ford and Chrysler, Gettelfinger said, and any modifications would still have to be ratified by local union members.

He also said the union will run a television ad in Maine, Kentucky, Indiana and Minnesota to put the faces of union workers on the controversy over the loans, and explain how the auto industry differs from the banking industry. The ads presumably are designed to pressure Congressional opponents of the loans.

"There's a perception problem," Gettelfinger said, stressing that the automakers' woes have painted a negative view of the union. "Yes, we have lost some clout."

Delaying the health care trust payments will help the companies survive their cash shortages, which they say were brought on by the severe economic downturn and the worst U.S. sales climate in more than a quarter century.

GM had been scheduled to pay more than $7.5 billion early next year to the union-administered fund which will take over retiree health care payments on Jan. 1, 2010. Ford owes $6.3 billion to its trust fund at the end of this year. Chrysler figures were unavailable.

The delay will have to be approved by federal courts, which already have blessed the trusts' formation.

All three companies agreed to fund the trusts, called voluntary employee beneficiary associations or VEBAs, as part of the landmark 2007 contract reached with the UAW. By doing so they move billions in liabilities off their books.

When they go into effect, the trusts will pay health care bills for about 800,000 UAW retirees, spouses and dependents at the three companies. GM expects to save about $3 billion a year when the expenses are moved, while Ford says it will save $1 billion.

The CEOs of all three automakers are heading to Washington for more hearings Thursday and Friday on their loan requests after an abysmal showing before lawmakers last month. Gettelfinger will also attend.

Congressional leaders demanded business plans from all three that include a reduction in labor costs so Detroit is more competitive with foreign automakers with U.S. factories. The companies submitted their plans to Congress on Tuesday.

"I don't think Congress is out for blood," Gettelfinger said of the criticism the union received during his previous testimony last month. "There will be more pressure on us to do this. We're going to step up and do it."

That sentiment was echoed by several union representatives at the news conference.

"Everybody has to give a little bit," said Rich Bennett, an official for Local 122 in Twinsburg, Ohio, representing Chrysler workers. "We've made concessions. We really feel we're doing our part."

But a retired GM worker said the union might be acting hastily out of fear that one of the automakers could shut down.

"Fear is a bad basis on which to make decisions," said Frank Hammer, of Local 909 in Warren, Mich. "I think they're making another mistake."

Members at Local 122 are fearful of losing their jobs, said Bennett's associate, Ken Walters. They're seeing nearby plants shut down on regular basis.

General Holliefield, the UAW vice president representing Chrysler workers, said union members "historically do the right thing" in terms of making concessions during tough times, although the moves outlined Wednesday came to fruition following last month's congressional thrashing.

"Washington didn't ask us for concessions," he said. "It wasn't anything we were thinking about."

The president of Chrysler said the UAW's willingness to change the union's contract is a good step.

Chrysler LLC President Tom LaSorda said during a Toledo rally for the industry on Wednesday that both sides need to go back and review the entire framework of the contract. He said if the union would surrender job security protections it would help the Detroit Three in the long run.


http://news.yahoo.com/s/ap/20081203/ap_on_bi_ge/autos_uaw

Yes...saw this on CNN this am......let us wait for the outcome.....a lot of pissed off employees I'm sure.....but better than losing the jobs altogether.....
Tony

I think if they would skim more of the cream off the top they would have more room for the milk at the bottom.

Yes...saw this on CNN this am......let us wait for the outcome.....a lot of pissed off employees I'm sure.....but better than losing the jobs altogether.....
Tony :)look at what a labor makes up there there paid more then a tool and die maker makes in most states been that way for last 50 years i no of any body been around knows that tool die maker is skilled trades thank you:cool:

so does that mean if i piss off my ex father inlaw which works for the same company and i have no problem with no one else means i could get f..... because he had coult

Let the system work, the automakers can't compete, let them go bankrupt! Honda BMW Nissan Toyota are building autos in the USA w/ no bailout.

this is to update this thread.

UAW grants concessions, Chrysler exec warns of depression as bailout lobbying intensifies

DETROIT (AP) -- Worried about their jobs and warned that the cost of failure could be a depression, hundreds of leaders of the United Auto Workers voted overwhelmingly Wednesday to make concessions to the struggling Detroit Three, including all but ending a much-derided program that let laid-off workers collect up to 95 percent of their salaries.

"Everybody has to give a little bit," said Rich Bennett, an official for Local 122 in Twinsburg, Ohio, representing Chrysler workers. "We've made concessions. We really feel we're doing our part."

Union leaders also agreed to let the cash-starved automakers delay billions of dollars in payments to a union-administered trust set to take over health care for blue-collar retirees starting in 2010.

In addition, they decided to let the Detroit leadership begin renegotiating elements of landmark contracts signed with the automakers last year, a move that could lead to wage concessions.

The vote came on the eve of congressional hearings on as much as $34 billion in loans that General Motors and Chrysler say are critical to their survival. Ford has said it may be able to hang on through 2009 without additional credit.

Democratic congressional leaders say they want to act to prevent one or more of the automakers from collapsing, but they have made no commitments to approve an unpopular bailout at a time of economic peril.

Senate Majority Leader Harry Reid said a Democratic plan to tap the Wall Street rescue fund to save U.S. automakers does not have the votes to pass.

UAW President Ron Gettelfinger said the union must help persuade Congress to offer the loans or risk destroying what he said is the country's economic spine.

"Let's look at the backbone and the millions of jobs lost if we lost this industry," he said.

Earlier in the day, Chrysler Vice Chairman Jim Press went a step further, warning of a depression if even one automaker runs out of cash.

"We're on the brink with the U.S. auto manufacturing industry," Press told The Associated Press in an interview. "If we have a catastrophic failure of one of these car companies, in this tender environment for the economy, it's a huge blow. It could trigger a depression."

Both Chrysler LLC and General Motors Corp. are so perilously low on cash that the companies may not be able to pay all their bills by the end of the year. GM wants a total of $18 billion in loans. Chrysler is seeking $7 billion, and both manufacturers say they need cash this month.

Ford Motor Co., which borrowed billions before credit markets tightened, says it can survive through 2009 and may not need to tap the $9 billion credit line it requested.

As a further sign of the companies' dire straits, Moody's Investors Service on Wednesday downgraded its ratings for GM and Chrysler, sending them further into non-investment, or "junk," status. Moody's affirmed its ratings for Ford, but said the outlook for the three automakers is "negative," implying further downgrades are possible.

Sent home empty-handed last month, executives from all three companies knocked on doors on Capitol Hill and made television appearances Wednesday, hoping the detailed plans they submitted Tuesday would convince hostile lawmakers to help. CEOs from all three, plus Gettelfinger, will appear before Senate and House committees Thursday and Friday.

Fritz Henderson, GM's president and chief operating officer, stressed on NBC's "Today" show that bankruptcy isn't a viable option.

Choosing bankruptcy, he said, would further erode consumer confidence in the automaker and "we want them to be confident in their ability to buy our cars and trucks."

All three executives took hybrid cars from Detroit to Washington after enduring harsh criticism last month for using corporate jets for the trip.

The automakers' plans were being scrutinized by legislators, the White House and the Treasury and Commerce departments.

"It sounds to me like the companies have given this a lot of thought and are willing to make some tough decisions," White House press secretary Dana Perino said. "We just need a little more time to pore through the documents."

President-elect Barack Obama said it appeared that the CEOs were returning to Congress with a "more serious set of plans" for how their companies are going to survive.

The plans painted the most dire portrait yet of the industry's woes -- including the prospect of shuttered factories and massive job losses if Congress does not act quickly.

The much-derided "jobs bank" that permits laid-off workers to receive most of their pay was created in the mid-1980s as a trade-off to the UAW for increased factory automation. But the system became a symbol for the union's largess when workers were paid for years after their factories closed.

Gettelfinger said the union will suspend the bank, but he did not give specifics or a timetable.

"We're going to sit down and work out the mechanics," Gettelfinger said. "We're a little unclear on some of the issues."

Members of Congress criticized the automakers last month for paying laid-off workers, saying it's one reason why their labor costs are higher than competitors. About 3,500 workers from all three companies are now in the jobs bank.

Until the 2007 contract, workers could stay in the jobs bank indefinitely, but the new pact imposes time limits. Workers in the bank must report to local union halls. Sometimes they do charity work, but other times they do nothing.

Gettelfinger stopped short of saying the union would reopen its contracts but said it would return to the bargaining table to change some terms. Modifications would have to be ratified by members.

Delaying the health care trust payments will help the companies survive their cash shortages, which they say were brought on by the severe economic downturn and the worst U.S. sales in more than a quarter century.

The delay will have to be approved by federal courts, which already have blessed the trusts' formation.

Democratic House Speaker Nancy Pelosi has said she hopes Congress acts to help the automakers. Reid said he would advance a bill Monday in preparation for a possible auto bailout vote later in the week.

The automakers, humbled by criticism from their last visit, gave lengthy plans with minute details about how they plan to repay the government money.

Ford CEO Alan Mulally and GM CEO Rick Wagoner both said they would work for $1 a year if their firms took any government loan money. Chrysler chief Robert Nardelli already works for $1 a year.

Per the UAW's constitution, Gettelfinger receives an annual salary of about $145,000 per year, plus insurance, retirement and other benefits.

Ford offered to cancel management bonuses and salaried employees' merit raises next year, and GM said it would slash top executives' pay. Ford and GM both said they would sell their corporate aircraft.

Nevertheless, Sen. Arlen Specter, a Pennsylvania Republican, said the mood in Congress "is not supportive" of the automakers, although he called the consequences of just one of them failing "cataclysmic."


http://biz.yahoo.com/ap/081203/meltdown_autos.html

Let the system work, the automakers can't compete, let them go bankrupt! Honda BMW Nissan Toyota are building autos in the USA w/ no bailout.

From what I can tell from all the people that are talking about it on the news shows....it all has to do with the quality of the autos......I wonder why that is????
Tony

I have always had/bought American cars, if our congress stupidly bails the auto Mfg's out. I will be purchasing the "other" american cars for the rest of my life.