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GM, UAW talks break off; Chrysler talks stall

Rob

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GM, UAW talks break off; Chrysler talks stall

February 14, 2009 - 4:15 pm ET
UPDATED: 2/14/09 8:38 p.m. EST

DETROIT (Reuters) -- Talks between the UAW and General Motors aimed at cutting costs and debt at the struggling automaker have broken down over union concerns about retiree healthcare, a person briefed on the talks said on Saturday.

A parallel set of talks between Chrysler LLC and the UAW over similar concessions were continuing over the weekend but little progress had been made in the past week, a person briefed on those negotiations said.

The breakdown of talks at GM and the stalled negotiations at Chrysler come with just three days remaining until both automakers must submit new restructuring plans to the U.S. government as a condition of their $17.4 billion bailout.

At GM, the UAW negotiators walked away from the bargaining table because of differences over how to pay the health care costs of retirees. No high-level negotiations were underway as of Saturday afternoon, although some working-level discussions continued, the person familiar with the talks said.

"It doesn't seem like the stakeholders are really prepared to give a whole lot," said independent auto industry analyst Erich Merkle. "It's a high stakes game of poker right now."

GM declined to comment directly on the state of negotiations with the union. "We are committed to talks with our stakeholders and to meeting the February 17 deadline," GM spokesman Tony Sapienza said.

Chrysler said it was also committed to meeting the terms of the federal bailout, which requires both automakers to reduce factory labor costs and the amount owed to a UAW-affiliated trust fund.

"We continue to engage all of our stakeholder groups as we work through this process," Chrysler said in a statement.

The UAW is owed some $20 billion by GM, money pledged to a healthcare trust fund for retirees. It faces demands from the company that it surrender a claim on half of that amount in exchange for stock in a recapitalized GM.

But the union has balked at saddling retired workers with additional risk. GM's bondholders, who are being asked to write off some $18 billion in debt in exchange for GM stock, have also held out for better terms, people briefed on the talks have said.

GM has received $9.4 billion from the U.S. government and has been pledged another $4 billion if it can demonstrate it can be made viable at a time when U.S. auto sales are near 30-year lows.

Chrysler has been given $4 billion in emergency funding from the U.S. Treasury and is seeking another $3 billion.

If GM cannot win agreement from the UAW and creditors to reduce its debt, analysts say the Obama administration will face a politically tough choice: either pump billions of dollars more into the struggling automaker or steer it toward bankruptcy.

The stakes are similar at Chrysler, which faces continued scrutiny over the question of whether it has the scale and cash to survive the deep recession in the U.S. market on its own.
 

Tiffany's Dad

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Typical of the auto unions. Let's not help out any. Let's just let the company go under. Something is better than nothing. Greed. Pure Greed. And they want more of our tax dollars to help them out when they don't want to help themselves. They just don't get it.:pat:
 
M

mswaim

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I believe GM is counting on bankruptcy; it will shelter them from creditors and force the unions to re-negotiate all of their existing contracts.
 
C

CADXLR-V

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Might not have been necessary if the democrats would have taken the golden opportunity they had to force the UAW to make concessions as a prerequisite to receive bailout funds. Instead they chose to just let the opportunity slip away to help ensure that those huge campaign donations that the unions make don't stop. They just played politics as usual and accused the republicans of being the enemy of the working class and union busters.

As an independent I can't tell you how disgusted I am with our ruling 2 parties. The senseless bickering and automatic defensiveness to any idea proposed by the "other" party is pathetic. :patriot:
 

standby-V

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Does this all sound familiar like our dear Mother England with the Torres and Wigs in Parliament fighting all day over nothing?
There is no need for a two party system, just Independents. California is one vote short of passing a budget and neither side wants to give in and in the mean time we people getting funds back on our taxes will get an IOU in case you haven't heard.
They owe me $2,700, so when I have to pay my Federal I'm going to send the IRS a IOU because California didn't pay me and see how they like it.
After all the money given to the auto industry they are going to go belly up and screw everyone.
My B of A bank is getting free money and still charging 5.9% for a refy. Where do they get the right to do this. These refies should be at 4% or even less.
Thank god I only have 20 years left at most, then I get my ashes thrown in the ocean and wind up on a lovely island somewhere in the South Pacific..............I think
Might not have been necessary if the democrats would have taken the golden opportunity they had to force the UAW to make concessions as a prerequisite to receive bailout funds. Instead they chose to just let the opportunity slip away to help ensure that those huge campaign donations that the unions make don't stop. They just played politics as usual and accused the republicans of being the enemy of the working class and union busters.

As an independent I can't tell you how disgusted I am with our ruling 2 parties. The senseless bickering and automatic defensiveness to any idea proposed by the "other" party is pathetic. :patriot:
 

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