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.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Chris Isidore, CNNMoney.com senior writer

Photos
Bailout road trip! Big 3 drive to Washington Bailout road trip! Big 3 drive to Washington Bailout road trip! Big 3 drive to Washington
Hat in hand, the head honchos from Ford, Chrysler and GM drove their own cars to Washington in search of a bailout worth billions.

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.

CNN correspondent Brooke Baldwin contributed to this report. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 things you'll love about Windows 10 There's a lot to like about Windows 10. Here are our favorite features in Microsoft's soon-to-be-released operating system. More
Warren Buffett's gone cold. How his top 10 stocks are doing The Oracle of Omaha is an investing legend. But several of Berkshire Hathaway's biggest investments are off to a lousy start in 2015. Will shareholders complain at the annual meeting in Omaha on Saturday? More
BMW's M235i doesn't compromise BMW's new M235i gives you the performance of an M car for a lot less money. More
Sponsors