DETROIT — The United Auto Workers’ deal with Detroit’s three automakers limits overtime, changes work rules, cuts lump-sum cash bonuses and gets rid of cost-of-living pay raises to help reduce the companies’ labor costs, people briefed on the agreement said Wednesday.
The UAW has reached a tentative agreement with General Motors Corp., Chrysler LLC and Ford Motor Co. over contract concessions, as GM and Chrysler sent plans to the Treasury Department asking for a total of $39 billion in government financing to help them survive.
Concessions with the union are a condition of the $17.4 billion in government loans that the automakers have received so far.
Base wages for UAW workers will remain the same, but the deal limits supplemental pay that laid-off workers receive while they collect unemployment benefits.
GM Chief Operating Officer Fritz Henderson declined to give details of the agreement Wednesday but said it takes major steps in cost and work rules toward narrowing the gap between U.S. automakers’ labor costs and those at Asian automakers’ U.S. plants.
The UAW said it won’t release details until it reaches agreements with the companies on payments into a union-run trust that will take over retiree health care expenses next year.
At issue is whether the union will accept payments to the health care trust in stock, instead of cash.
Carmakers General Motors Corp. and Chrysler LLC expect to burn through $17.4 billion in government loans in three months and they want billions more to stay alive.
The ink is still drying on their new requests for an additional $21.6 billion, but for President Barack Obama’s month-old administration, there are no easy answers.
Give them more money? GM and Chrysler could return seeking more. Let them slip into bankruptcy? Hundreds of thousands of jobs could be lost. Try a government-led bankruptcy? In GM’s case, that might cost up to $100 billion.
“There can’t be a bottomless pit to this. There aren’t the resources to deal with it,” White House press secretary Robert Gibbs said Wednesday as the government began reviewing the automakers’ plans.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
