GM held to be near deal on job cuts

UAW, Delphi talks weigh major exodus

March 18, 2006|By DETROIT FREE PRESS

DETROIT -- General Motors Corp., Delphi Corp. and the United Auto Workers are close to an agreement on a major job-cutting plan to offer retirement packages to thousands of blue-collar workers, a pact that would help the struggling automaker avert a crippling strike at the auto parts supplier, sources familiar with the talks said yesterday.

GM and the UAW are expected to announce details of the package as early as today. It could spur one of the largest exoduses of people from the automaker in its history.

The deal would help GM accelerate its efforts to cut 30,000 jobs across North America by the end of 2008, including 25,000 in the United States. It also would move the automaker and the union closer to a deal on a bailout package for Delphi, a major parts supplier to GM, which once was its parent, the sources said. Delphi, which is undergoing bankruptcy reorganization, has threatened to void its union contracts.

GM also indicated yesterday that it hopes to persuade the UAW to modify the jobs bank program, part of the union contract under which hourly workers are paid nearly full wages and benefits during idle times and layoffs.

GM's board of directors held an unscheduled conference call yesterday to discuss the costs of the buyouts, one person familiar with the board said. The board meeting came a day after GM said it lost $10.6 billion last year - $2 billion more than it reported in January - mostly because of higher costs related to Delphi and the automaker's plans to idle a dozen plants.

The losses, coupled with GM's announcement that it would delay filing its annual financial report with the Securities and Exchange Commission for as long as two weeks, sent the automaker's shares down sharply.

GM shares dropped $1.09, or 4.9 percent, to close at $21.13 on the New York Stock Exchange.

GM has continually cut its U.S. blue-collar work force. At the end of 2005, GM had 105,000 hourly workers in the United States, down from 133,000 in 2000. About 40,000 of those hourly workers are eligible to retire, and many could be persuaded to leave with a check in hand.

Falling vehicle sales have left GM with an excess of workers. It has about 8,000 U.S. workers in the jobs bank, and the early-retirement offer could help clear it out.

GM executives have said that the jobs bank puts the company at a competitive disadvantage because it's a cost that foreign automakers don't bear.

The executives have hinted that the bank could be eliminated or the benefits reduced, and GM affirmed that view in a regulatory filing.

"GM believes it is likely that the jobs bank provisions will be modified," after the current contract expires in September 2007, the automaker said, declining to comment further.

United Auto Workers President Ron Gettelfinger has said in the past that the jobs bank won't be eliminated.

GM's hourly workers said they were eager to hear details of the buyout package.

"I've been praying and hoping for this for a long time," said John Krzanowsky, 53, who has worked 34 years at GM's metal fabrication plant in Lordstown, Ohio.

He said many co-workers also are eager to get out.

Many would like to retire, he said, but are afraid they won't be able to afford the higher health care costs for retirees, a concession that the UAW agreed to with GM last year.

"We're going to have to pay more for our health care. A lot of people can't afford to retire," Krzanowsky said.

The retirement package also would free jobs to allow some Delphi workers to return or flow back to GM, the automotive parts supplier's parent before a 1999 spinoff.

Delphi, which filed for bankruptcy protection Oct. 8, has said it will ask a New York bankruptcy court to void its labor contracts unless it gets the UAW to agree to a new contract.

The UAW has warned that voiding the contracts would trigger a strike, a move that would quickly shut down GM plants.

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