Deadline puts UAW talks focus on Chrysler

4/17/2009

DETROIT - The United Auto Workers union has placed concession talks with General Motors Corp. on the back burner as it tries to reach a deal with Chrysler LLC before an April 30 government deadline, two people briefed on the negotiations said yesterday.

The decision likely means that any deal with Chrysler will set the pattern for concessions granted to GM as both companies try to show the government they have cut costs enough to get more government loans.

Chrysler has to ink an alliance with Fiat Group SpA by April 30 to get more government aid. Without further help, Chrysler likely would be auctioned off in pieces under bankruptcy court supervision.

GM's government deadline is June 1, but the Obama Administration said it will provide bankruptcy financing if the company can't successfully restructure outside of court.

Neither a GM spokesman nor a UAW spokesman would comment on the negotiations. A Chrysler spokesman would not comment beyond a statement that the company has a goal to reach a conclusion by April 30.

The Canadian Auto Workers union has said that it plans to resume negotiations with Chrysler on Monday after Fiat CEO Sergio Marchionne said the Italian automaker will walk away from the proposed tie-up unless Chrysler's unions agree to major cost cuts.

Chrysler, GM, and Ford Motor Co. all reached concession deals with the UAW in February to limit overtime, cut lump-sum cash bonuses, and eliminate cost-of-living pay increases. The union also agreed to suspend the jobs bank in which laid-off workers are paid most of their wages.

Workers at Ford, which is not receiving government aid, ratified their deal, but the GM and Chrysler pacts never were presented to union members because they got hung up on funding for a union-run trust that will take over retiree health- care expenses next year.

GM has received $13.4 billion in government loans and may need more money this month as it tries to survive the worst auto sales downturn in 27 years. Chrysler has received $4 billion and has requested up to $6 billion more.