GM Says Any UAW Deal Will Differ From Ford Pact - CFO
26 Februar 2009 - 3:15PM
Dow Jones News
A senior executive at General Motors Corp. (GM) said Thursday
that a new union contract required for its survival may look
significantly different that the deal cut by workers'
representatives this week with Ford Motor Co. (F).
GM needs to secure concessions from its union, creditors and
other stakeholders to keep and expand the U.S. government aid it
says is essential for its survival.
"We need to analyze what they agree to and make sure we come to
an agreement that's competitive and works with our viability plan,"
GM chief financial officer Ray Young told reporters after the
company reported a $9.6 billion loss for the fourth quarter.
GM is racing to strike a deal with the United Auto Workers union
that alters how the company funds a massive, union-run trust that
will cover retiree medical costs starting in 2010. GM wants to
cover much of its obligation in equity rather that cash to preserve
liquidity.
Ford and the UAW reached an accord earlier this week which would
allow the auto maker to support its health care fund for retirees
with a combination of equity and cash. Previously it faced the
prospect of making the $10 billion in payments due next year only
in cash.
Typically, agreements between the UAW and Detroit's three auto
makers involve similar terms. But Ford, the only one of the three
not surviving on federal aid, has more liquidity than either GM or
Chrysler LLC.
GM's situation is complicated by a parallel set of negotiations
underway with bondholders. The auto maker is looking to bondholders
to swap at least two-thirds of $27 billion in debt obligations for
equity in a restructured company.
A committee representing bondholders is pushing for more
sacrifice from the other parties, including the UAW. he U.S.
government won't penalize
-By Sharon Terlep; 248-204-5532; sharon.terlep@dowjones.com
(Jeff Bennett contributed to this article)