Archive for Sunday, February 15, 2009

GM, Chrysler labor talks slow

February 15, 2009


— Concession talks between the United Auto Workers and the Detroit Three shifted into an odd phase Saturday as negotiations broke off with General Motors Corp., slowed at Chrysler LLC and picked up speed at Ford Motor Co., financially the healthiest of the three, according to people briefed on the bargaining.

The developments come as GM and Chrysler race toward a Tuesday deadline to submit plans to show the government how they will become viable and repay billions in loans that are keeping them alive during the worst auto sales slump in 26 years.

Ford, which borrowed billions from private sources before credit markets tightened, has said it can make it through 2009 without government help.

The Treasury Department has committed to giving GM a total of $13.4 billion if the automaker’s plan is approved. GM’s plan, however, will raise the possibility that more government loans may be needed, as sales in overseas markets have deteriorated worse than expected, according to a person briefed on the plan.

That means GM may seek another $5 billion, raising the loan amount to about $18 billion, the amount that GM sought when it made a presentation to Congress in December. The company will discuss bankruptcy in its plan but will emphasize using loans to get through the sales slump, said the person, who spoke on condition of anonymity because the preparations are private.

Top executives of Chrysler and GM have said bankruptcy is not an option for automakers because people will not make big-ticket purchases from a company that may not be around.

Detroit-based GM is living on $9.4 billion in government loans, and the Treasury Department must approve its viability plan for it to get $4 billion more. Chrysler has received $4 billion in government loans and wants an additional $3 billion.


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