UAW says working to prevent "run" on GM, Chrysler

By David Bailey

DETROIT (Reuters) - United Auto Workers President Ron Gettelfinger on Friday blamed Senate Republicans for the collapse of the auto bailout bill and said the union was ready to do its part to prevent creditors from forcing General Motors Corp or Chrysler LLC into bankruptcy.

"We're going to work tirelessly to make this happen and realize that there's going to have to be restructuring," Gettelfinger told reporters.

Gettelfinger said the key now is to prevent suppliers from stopping shipments to GM or Chrysler or demanding payment in cash up front -- a situation he likened to "a run on the bank."

"We need to satisfy the suppliers that there is going to be a tomorrow," he said.

Without immediate federal help now by the White House through the $700-billion fund for the banking system, GM will not be able to make it out of December, and Chrysler's own dire cash position is similar, he said.

"If we worked for nothing, it wouldn't help them limp into January," Gettelfinger said.

Senate negotiations over a $14 billion package to extend emergency loans to the auto industry broke down late Thursday. That came after the UAW balked at requirements from Senate Republicans that would have forced the union to agree to sweeping concessions on the spot.

"We wondered, quite frankly, if we were just being set up," Gettelfinger said.

The UAW has been a stalwart ally of the Democratic party and worked hard for the election of President-elect Barack Obama.

Gettelfinger said some Republicans, particularly from southern states like Alabama, saw the bailout negotiations as a way to cripple the union while aiding the Japanese, South Korean and German automakers that have located plants and supply operations in their home districts.

"They thought perhaps they could have a twofer here maybe -- pierce the heart of organized labor while representing the foreign brands," he said....More

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UAW Auto Workers To Hold Emergency Meeting

Auto Workers To Hold Emergency Meeting In Detroit To Help Big 3 Get Government Loans

(CBS/AP) Local United Auto Workers leaders from across the U.S. will hold an emergency meeting in Detroit on Wednesday to discuss concessions the union could make to help auto companies get government loans.

UAW leaders called the meeting Monday night in an e-mail, obtained by The Associated Press, to local union presidents and bargaining chairmen.

Among the subjects to be discussed at the meeting will be the possibility of restructuring the union-administered health care fund so that the automakers can delay payments to the multibillion-dollar fund, according to a person familiar with the matter.

The union leaders will also discuss potentially eliminating the jobs bank, in which laid-off workers keep receiving most of their pay. The person spoke on condition of anonymity because the details of the talks haven't been finalized.....Read more

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The United Auto Workers union is in talks with some of Detroit's Big Three auto makers

DETROIT -- The United Auto Workers union is in talks with some of Detroit's Big Three auto makers to stop a program that pays idled workers, people familiar with the matter said.

The so-called jobs banks, while shrinking, have been viewed by critics as a competitive disadvantage for Detroit auto makers, calling them an overly generous benefit at companies that are posting billions in losses. Union officials and their allies counter that the banks have been an effective way to keep a flexible job pool available and have allowed the companies to implement new technology while reducing overall numbers responsibly.

Labor leaders and auto makers insist that the much-criticized program to pay idled workers has been dwindling away on its own, thanks to new, stricter terms under the current union contract. The size of the revamped program, which pays nonworking employees almost their full wages at General Motors Corp., Ford Motor Co. and Chrysler LLC, has dropped to about 3,000 hourly employees, according to the companies. That's down from 15,000 workers just two years ago, a trend largely driven by time restrictions put in place as part of current union contracts. There are about 1,400 workers in the Ford jobs bank, 1,000 at GM and 500 at Chrysler.

But while officials at Ford expect that the number of employees in its jobs bank will decrease by a third by year end, the numbers will likely swell at GM in the near term because of a new round of cutbacks that have reduced the number of shifts at some plants and closed other facilities faster than expected.

Elimination of the jobs bank isn't likely to be a part of the business plans that the auto makers will submit to Congress this week, when they head back to Washington in an effort to secure billions in emergency loans. But people familiar with the matter at GM said the union has put the issue on the table for discussion. (The Big Three left Washington last month without the $25 billion loan package they were seeking and will return this week with the goal of proving that, with government assistance, they will be viable in the long-term.)

UAW officials, including its president Ron Gettelfinger, are said to understand that they are under pressure to deliver cost concessions. Mr. Gettelfinger "understands the UAW is part of the solution here," a person close to the UAW president said. "He doesn't want to be characterized as the problem." A spokesman for the union declined immediate comment.

The topic is so politically sensitive that Mr. Gettelfinger sought to define the issue last month before members of Congress had a chance to criticize it. "Since September of 2005 through September of 2008, we have lost 47,000 workers at General Motors. By the same token, during that period of time and with that loss, we have all but virtually eliminated our jobs banks at all three companies," Mr. Gettelfinger told a Senate panel. "We recognize that in order for these companies to be competitive, we had to make the tough calls."

During the past three years, the UAW agreed to eliminate tens of thousands of union jobs, reduce health-care coverage for union retirees and cut wages for new hires. Those moves essentially leveled the future playing field between the Big Three auto makers and their foreign-owned rivals in terms of labor costs.

—John D. Stoll and Kate Linebaugh contributed to this article.

Write to Matthew Dolan at matthew.dolan@wsj.com

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Are There UAW Concessions Coming?

(CNSNews.com) – The Big Three automakers are forced to pay 85- to 95-percent of union wages and benefits to members of the United Auto Workers union who aren’t working – even if their plants have been closed.

Industry analysts say union labor agreements that obligate the Big Three to pay millions of dollars to workers who are no longer working are a major reason why the automakers are in trouble – a problem that no short-term bailout can fix.

During hearings last week where the chief executives of Ford, Chrysler and General Motors appeared before the Senate Banking Committee, Sen. Bob Corker (R-Tenn.) raised the issue.

Corker asked Rick Wagoner, CEO of General Motors, why with all of the measures he has taken to prevent a collapse, his company was still not making money.

“Is it because of the (United Auto Workers) union?” Corker asked pointedly.

Wagoner, who demurred from answering directly, said that even at plants that are closing, “85 percent” of union employment benefits still “have to be paid.” He said that GM has had to restructure and reduce the cost of operating in the U.S., but the company still pays for employees that are not currently working at “idle facilities.”

Chrysler Chairman Robert Nardelli, facing a similar question from Corker, confirmed that “agreements are in place” between Chrysler and UAW that, regardless of demand, Chrysler must still operate at a pay rate of 95 percent of wages for employees not currently working at idle facilities.

Peter Morici, a professor at the University of Maryland’s school of business, told CNSNews.com that one of the biggest problems the companies face is the UAW’s Jobs Bank – a program established more than two decades ago that guarantees nearly full salary and benefits to out-of-work employees.

“Right now if a plant closes in St. Louis and a new one opens in Kansas City, the workers don’t have to move from St. Louis to Kansas City; they can opt to get a $105,000 payout or go on Jobs Bank where they can collect 95 percent of pay for the rest of their lives,” Morici said.

The Detroit automakers have not released official numbers indicating how much they currently spend on their respective Jobs Banks, but previously released four-year labor contracts signed with the UAW in 2003 revealed “contribution caps” to be implemented by each of the Big Three.....More

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