Report: GM close to UAW deal; GM to follow Chrysler bankruptcy model
05/15/2009, 9:47 AM
By Andrew Ganz
General Motors and the United Auto Workers union are apparently closing in on a deal that would cut the automaker’s hourly labor costs by up to $1 billion annually, according to insiders familiar with the matter. Additionally, the automaker said late yesterday that it expects to follow the same legal strategy that Chrysler’s structured bankruptcy is using.
The Wall Street Journal cited sources familiar with the deal as saying that GM will also cut its retiree health costs in half to about $10 billion. The UAW would also receive about a 39 percent equity stake in the automaker. The terms of the agreement could be reached as early as next week.
GM currently owes the UAW about $20 billion for retiree healthcare.
The Detroit automaker said in a regulatory filing that it is closely following the Chrysler bankruptcy model by using federal oversight to dramatically slash debt. The automaker is expected to announce numerous dealership closings later today.
05/15, 11:51 AM
posted by:
RaineMan
To all of you who said GM would never go bankrupt… I laugh.
05/15, 11:57 AM
posted by:
RaineMan
May I also say that I think it is a monumentally foolish and shortsighted plan to give the unions majority stake in these corporations. The unions caused half of the problems in the first place, especially at GM with all their strikes and high legacy costs. Making them masters of their own destiny is going to cause more problems down the road… just like letting the inmates run the asylum.
05/15, 12:26 PM
posted by:
Lariat Luxury Locomotive Liner No.3
Same management—same problems. GM is gone.
05/15, 12:41 PM
posted by:
ricky_b
I’d say I’d have to agree with both of you on this. Esp if they wind up sellling Opel.
05/15, 12:53 PM
posted by:
Borat
RaineMan, you can laugh, but if you pay taxes or have children, more appropriate emotion would be tears. If formula is the same, and there is no reason to believe otherwise, UAW will control and own two companies that it destroyed and until those companies will be able to stay on its own feet (probably never or election 2012) we will subsidize design, production and development of vehicles that no one has intention of buying, except union members working and owning those plants. It is a sad day for the country, economy, our beliefs values.
05/15, 5:12 PM
posted by:
yarddog82abn
you gotta hit rock bottom before you can get up aging….
05/16, 4:32 PM
posted by:
shane train
Why would they follow Chrysler’s example, when they could be taking notes on Ford?
05/16, 9:40 PM
posted by:
monte
They should just claim bankruptcy and get this giant monkey off their back.
05/17, 4:35 PM
posted by:
shane train
The multi billion dollar loans make that complicated.
The monkey is pretty stubborn when a whole nation just watched you get handed that kind of green.
05/17, 9:51 PM
posted by:
Coastal44
This whole scenerio reminds me of a person that has to puke, but keeps trying to hold it back. Just let it go (file bankruptcy) and you’ll feel much better
05/18, 9:47 AM
posted by:
shane train
But if you puke right now, you’ll puke all over the guy who just handed you another loan.