DETROIT — The United Auto Workers said Wednesday it is willing to change its contracts with U.S. automakers and accept delayed payments of billions of dollars to a union-run health care trust to do its part to help the struggling companies secure $34 billion in government loans.
United Auto Workers President Ron Gettelfinger said the union will suspend the jobs bank, in which laid-off workers are paid up to 95 percent of their salaries while not working, but he did not give specifics or a timetable of when the program will end.
“We’re going to sit down and work out the mechanics,” Gettelfinger said at a news conference after meeting with local union officials. “We’re a little unclear on some of the issues.”
Members of Congress criticized the automakers last month for paying workers who are not on the job. About 3,500 auto workers across the three companies are currently in jobs bank programs.
One local union member who was in the meeting said the changes to the jobs bank would nearly eliminate the program. The member asked not to be identified because the details had not been made public.
Gettelfinger stopped short of saying the union would reopen contract talks with General Motors Corp., Chrysler LLC and Ford Motor Co. but said it would be willing to return to the bargaining table to change some terms.
Talks with GM will begin immediately, but additional bargaining officials must be elected for Ford and Chrysler, Gettelfinger said, and any modifications would still have to be ratified by local union members.
He also said the union will run a television ad in Maine, Kentucky, Indiana and Minnesota to put the faces of union workers on the controversy over the loans, and explain how the auto industry differs from the banking industry. The ads presumably are designed to pressure Congressional opponents of the loans.
“There’s a perception problem,” Gettelfinger said, stressing that the automakers’ woes have painted a negative view of the union. “Yes, we have lost some clout.”
Delaying the health care trust payments will help the companies survive their cash shortages, which they say were brought on by the severe economic downturn and the worst U.S. sales climate in more than a quarter-century.
GM had been scheduled to pay more than $7.5 billion early next year to the union-administered fund which will take over retiree health-care payments on Jan. 1, 2010. Ford owes $6.3 billion to its trust fund at the end of this year. Chrysler figures were unavailable.
The delay will have to be approved by federal courts, which already have blessed the trusts’ formation.
All three companies agreed to fund the trusts, called voluntary employee beneficiary associations, or VEBAs, as part of the landmark 2007 contract reached with the UAW. By doing so they move billions in liabilities off their books.
When they go into effect, the trusts will pay health-care bills for about 800,000 UAW retirees, spouses and dependents at the three companies. GM expects to save about $3 billion a year when the expenses are moved, while Ford says it will save $1 billion.
The CEOs of all three automakers are heading to Washington for more hearings today and Friday on their loan requests after an abysmal showing before lawmakers last month. Gettelfinger will also attend.
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