UAW agrees to help automakers
Union says it will work on changes in labor contract, a key to winning support for federal bailout of GM, Ford and Chrysler.
NEW YORK (CNNMoney.com) -- The United Auto Workers agreed to work with the embattled U.S. automakers about changes in their labor contract, an important step for the industry's chance to win up to $34 billion in federal loans.
The announcement was made Wednesday by UAW President Ron Gettelfinger at a news conference after meeting with union officials from plants operated by General Motors (GM, Fortune 500), Ford Motor (F, Fortune 500) and Chrysler LLC.
GM has warned it will run out of the money it needs to operate later this month unless it gets assistance from the government. GM said it needs $4 billion before the end of the year. Chrysler said it will run out of cash in the first quarter of next year without help.
The companies all presented plans to Congress Tuesday for how they would use federal loans to return to profitability. The Big Three CEOs and Gettelfinger are due to appear at Senate and House hearings Thursday and Friday seeking support for the loan package.
Gettelfinger said the union will suspend the "jobs bank" at GM. That is a jobs guarantee program that pays laid off auto workers up to 95% of their regular pay. He said the union is also open to suspending the jobs bank at Ford and Chrysler. But he said this and other help from the union is not enough to save the automakers from their current crisis.
"To be honest with you, right now if the UAW members went in these facilities and worked for nothing...it would not help the companies that much," he said.
He said the union also is willing to have the companies delay billions in payments to the trust funds that will assume responsibility for retiree health care coverage in 2010, although he said that such a move would require court approval. Those payments are not due until next year.
The shift of those obligations, estimated at about $100 billion, was a major victory for the automakers in the 2007 labor agreement.