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Under the terms of the $17.4 billion granted to GM and Chrysler last month, the companies have until Feb. 17 to hammer out amendments to their current contracts that would bring labor costs in line with those of employees at foreign auto companies' plants in the U.S.
Those concessions must be approved by union members and submitted as part of GM and Chrysler's restructuring plans by March 31. That's when the government can call in the loans if the requirements haven't been met.
GM Chief Executive Rick Wagoner said Thursday that he expected the company will come to an agreement with the UAW.
``I'm confident that we'll come together and get the kind of changes that we need,'' Wagoner said on NBC's ``Today'' show, where he was joined by United Auto Workers President Ron Gettelfinger.
Gettelfinger said the union will ensure that ``what we do is done in the best interest of our members as well as our retirees.''
If talks between the union and GM fall apart, the union may not be able to go on strike, its most potent weapon against the company. A provision of GM's loan agreement with the government would automatically place the loans in default if a union strikes, according to a GM filing with the Securities and Exchange Commission.
Dave Green, president of a UAW local at a huge GM stamping and assembly complex in Lordstown, Ohio, near Youngstown, said workers have been asking him what they will have to give up, but he doesn't have an answer because the union's national bargaining committee will not meet until Monday.
``We recognize that some concessions will have to be made,'' Green said. ``We just don't know exactly what they are.''
UAW officials would not say if or when formal talks with GM and Chrysler would begin, however both sides have met in recent weeks.
``We continue to have regular, ongoing discussions with our union partners,'' said GM spokesman Tony Sapienza. ``We are in the process of talking with them at heightened levels about the challenge ahead, how to meet the requirements of the bridge loan.''
In Thursday's television interview, Wagoner said the much-cited $10-an-hour wage difference between GM autoworkers and workers at U.S. plants owned by foreign automakers ``may be a little on the high side.'' He said productivity at the company's factories is among the highest in North America.
Hourly wages for UAW workers at GM factories already are about equal to those paid by Toyota Motor Corp. at its older U.S. factories, according to the companies. GM says the average UAW laborer makes $29.78 per hour, while Toyota—generally viewed as the main competitor of the Detroit Three—says it pays about $30 per hour.
But including benefits and the cost of providing health care to more than 432,000 GM retirees, the Detroit automaker says its total labor cost is around $69 per hour, compared with an all-inclusive cost of $53 per hour at Toyota. GM's total cost will drop to $62 per hour in 2010 when a UAW administered trust fund starts paying retiree health care costs instead of the company, but that still leaves a $9 difference, mainly due to the ``legacy'' costs of century-old GM paying its retiree pensions.
Wagoner said Thursday that the GM can survive long-term without cutting benefits to retired workers.
Other items that will be on the table include payments and benefits to laid-off workers. The union has agreed to end the ``jobs bank'' program under which laid-off workers can receive about 95 percent of their pay and benefits for years, but the government's plan calls for the companies to eliminate other payments that supplement state unemployment benefits immediately after a layoff.
The plan also calls for the UAW to take company stock instead of cash for half the payments into the union-run health care trust. Green said that worries workers.
``I'm concerned because it fluctuates,'' Green said of GM shares. ``So you don't know how that's gonna impact 10, 20 years down the road.''
GM and Chrysler are struggling for survival in an industry that is in the midst of its worst sales slump in decades. On Monday, GM said its U.S. auto sales in December fell 31 percent, while Chrysler's sales plunged 53 percent.
Ford Motor Co. CEO Alan Mulally has said his company does not plan to use federal aid but would expect the same concessions from the union even though Ford wouldn't be under government supervision.
``The UAW supports the entire industry. They represent employees at all three companies. I can't imagine being disadvantaged on that,'' Mulally said in a December interview with The Associated Press. ``I would think whatever's done on that we would continue to do together because they support all of us.''
The White House approved $13.4 billion in loans for GM and $4 billion for Chrysler last month, with loans for both automakers being funded by the $700 billion Wall Street bailout package passed last year.
AP Auto Writers Tom Krisher in Detroit and Dan Strumpf in New York contributed to this report.
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