• search

GM, UAW talks seen progressing toward buyout deal

Written by: Staff
|

CHICAGO, Mar 21 (Reuters) General Motors Corp. and the United Auto Workers union on Tuesday were making progress toward a deal that would offer incentives to thousands of factory workers to take an early retirement, people familiar with the negotiations said.

Representatives of GM, its bankrupt former subsidiary Delphi Corp. and the UAW met through the weekend and on Monday in Detroit and were back at the bargaining table again on Tuesday, the sources said.

Union leadership has called on locals to confirm the number of factory workers already eligible to retire with 30 years of service and those just short of that experience level, one official said.

Those numbers would be key to the cost of any deal to GM, which last week estimated that its exposure to Delphi would be between .5 billion to billion.

Indications of progress in the crucial negotiations sent GM's shares up more than 4 percent to .78 on Tuesday.

Local UAW officials said they were waiting to hear the terms of the proposed retirement incentives, which analysts have seen as a major step toward avoiding a strike at Delphi that could cripple GM.

GM, which has lost market share to Japanese rivals and faces high fixed costs, plans to shut all or part of 12 plants and cut 30,000 jobs by 2008.

For its part, Delphi, which filed for bankruptcy in October, has said that it must slash wages, benefits and jobs to reorganize its U.S. operations.

Delphi has said it will ask a federal bankruptcy judge to void its existing contract if no deal to reduce its costs has been reached by month end.

The UAW has said such a move could prompt a walkout, a labor disruption that analysts say would effectively shut down GM's auto production and derail its turnaround efforts.

By offering buyouts to UAW workers, GM would reduce its own operating costs and create some space on its payroll for some Delphi workers to return.

When GM spun off the auto parts supplier in 1999, it did so with a promise to cover the pension and health care benefits of union employees and to allow eligible workers to return to open positions at GM.

GM has about 105,000 blue-collar workers represented by the UAW, while Delphi has about 24,000.

Robert Betts, president of UAW Local 2151, which represents workers at a Delphi factory in Coopersville, Michigan, said that about 9,000 union workers at Delphi were currently eligible for retirement.

However, the discussions are more complicated because of the still unresolved questions of how many Delphi workers would return to GM and how many plants Delphi would continue to run, he said.

Chris Sherwood, president of UAW Local 652 in Lansing, Michigan, said that of the 5,200 workers in his local, about 1,600 were currently eligible to retire. That share would rise to about half of the membership if those just a few years short of retirement were included, he said.

''Those are the ones that would really take it,'' Sherwood said, referring to those near retirement.

Early retirement incentives would not have to be ratified by rank and file workers, but were expected to be reviewed at union council meetings in early May, UAW officials have said.

Delphi's participation in the early retirement program would have to be cleared by federal bankruptcy court.

Analysts have suggested that Delphi could lower its labor costs by getting a large share of its current work force to retire or return to GM and then rehiring as needed at lower wages and with reduced benefits.

JPMorgan analyst Himanshu Patel said in a note on Tuesday that he estimated the auto parts supplier was looking to cut about 20,000 of its 34,000 hourly workers.

An estimated 70,000 UAW workers are eligible for retirement over the next two to three years, making them potentially eligible for the buyout terms being negotiated.

REUTERS DH RAI0210

For Daily Alerts

For Breaking News from Oneindia
Get instant news updates throughout the day.

Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more