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.
