General Motors Corp. (GM) confirmed it reached a tentative new
labor agreement with the United Auto Workers, clearing a major
benchmark the auto maker is expected to reach as part of its
restructuring plan.
GM, which is surviving on federal loans, is racing to
restructure by June 1 under close watch of the Obama
administration. Still, there is speculation the company could enter
into bankruptcy court in as little as 30 days.
On Friday, the company said the changes to the collective
bargaining agreements are subject to ratification by UAW members
and approval by GM's board. Details of the definitive terms of the
tentative agreement aren't expected to be publicly disclosed by GM
until after member ratification is complete.
People familiar with the UAW agreement said it largely mirrors
concessions the UAW granted Chrysler LLC last month, including a
suspension of cost-of-living allowance, bonuses and some
holidays.
The union is expected to present the pactto 60,000 GM workers
starting Tuesday. About one-third of those employees will lose
their jobs under GM's restructuring plan.
In addition, GM said Friday it reached a non-binding
understanding with the U.S. Treasury and UAW with respect to
modifications to the UAW Voluntary Employees' Beneficiary
Association agreement. The details of those terms won't be released
until the union agrees to definitive terms, GM said.
Shares were down 17% to $1.59 in recent trading.
-By John Kell, Dow Jones Newswires; 201-938-5285; john.kell@dowjones.com