Workers protest: PRE-CONTRACT NEGOTIATIONS: GM to look for more concessions

[Charles Brown <cbrown@xxxxxxxxxxxxxxxxx>]

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PRE-CONTRACT NEGOTIATIONS: GM to look for more concessions


Wagoner praises UAW, says they need to work together

January 9, 2006



BY MICHAEL ELLIS

FREE PRESS BUSINESS WRITER



U.S. Sen. Thomas Carper, D-Del., left, shakes hands with GM Chief Executive
Officer Rick Wagoner on Sunday at the auto show. (AMY LEANG/Detroit Free
Press)

With hundreds of angry autoworkers protesting outside Cobo over industry
cutbacks, General Motors Corp.'s chief made it clear Sunday he wants the UAW
to accept even more cost cuts before the contract expires next year.

High priority on his list: the UAW jobs bank, which pays laid-off workers.

Asked if GM wants to eliminate the jobs bank before the contract expires in
September 2007, Chief Executive Officer Rick Wagoner said, "There's a lot of
issues that we need to discuss in the next contract, and a lot of
improvements that we see possible in cost competitiveness even between now
and the next contract. We want to work every day on it and we'll not wait
until September of '07 to address some of these issues."

Last year, GM and the UAW agreed to landmark health care concessions. But on
Wall Street, GM's cost reductions so far have received a tepid response.
Experts who follow the industry said the automaker has to do much more to
turn its operations around from losses in North America of almost $5 billion
through the first nine months last year.

GM's stock price tumbled to new lows late last year, even after GM announced
plans to shift more health care costs to retirees and to idle 12 North
American plants and facilities and cut 30,000 hourly jobs over the next
three years.

Wagoner said the UAW will need to confront the cost of the jobs bank, under
which GM and the other Detroit automakers pay hourly autoworkers full wages
and benefits even when a plant has closed or stopped production.

The jobs bank program was designed to provide a safety net for workers
during a temporary downturn. But the costs of the program have mounted and
have become a permanent burden.

Wagoner didn't specify how much the program costs. But a person familiar
with the program told the Free Press last year that GM pays between 5,000
and 6,000 workers in the jobs bank -- the most of any company -- costing the
automaker an estimated $700 million to $800 million annually.

GM's plans to idle more facilities over the next three years could add to
those costs, unless the UAW agrees to alternatives.

More immediately, GM will play a major role as the UAW and Delphi try to
create a new contract.

Wagoner praised the UAW, and said that joint action with the union is the
best approach to cutting costs.

"Our first choice is to try to work this stuff out together, and if we can
do that, it works better. Maybe it's not always possible," he said.

Last year, Wagoner threatened unilateral action if the UAW didn't agree to
the health care cuts. But he stressed that since the jobs bank is part of
the contract, the automaker can't cut it unilaterally.

"We need to sit down and work with the UAW on the best ways to make sure
we're competitive. I think clearer than ever, it's in our interest and
theirs, but we do have to do it jointly," he said.

Wagoner said this year could be better for the automaker, although he
declined to predict when GM could return to profitability.

The targeted $6 billion in structural cost cuts and the new full-size SUVs
going on sale soon will help, he said.

"We certainly are driving to have much better results in North America this
year," he said.

Contact MICHAEL ELLIS at 313-222-8784