GM is willing to cut imports if it helps talks on union pact

5/15/2009

General Motors Corp., facing a probable bankruptcy by June 1, is willing to "substantially" cut planned U.S. imports from China and elsewhere to get a money-saving agreement with the United Auto Workers.

Using U.S. production instead of imports would pivot on whether the UAW can build the vehicles at a cost GM can afford, Chief Executive Officer Fritz Henderson said. He said Detroit-based GM had forecast a 12-fold increase in imports to 235,000 by 2014.

"This is a discussion we're having with the UAW," Mr. Henderson said. "We're most profitable when we build where we sell."

GM's decision to shut 16 U.S. plants and boost imports to 7 percent of North American sales has emerged as a sticking point in talks on a new UAW contract. GM needs the accord as part of a plan to chop debt with the UAW, bondholders, and the government by $44 billion or be forced into bankruptcy in 18 days.

The CEO said "it is probable" that GM will end up in court protection, going beyond a May 11 comment that a Chapter 11 filing was "more probable" than GM officials previously thought.

UAW President Ron Gettelfinger and Vice President Cal Rapson met with members of an Obama Administration auto task force May 5 in Michigan to protest the import plans, UAW Vice President Bob King said last week. The union wrote to senators urging them to prod GM to reduce U.S. plant closings.

"I think you will see in the end a substantially lower amount of volume would be brought in and a substantially higher amount will be built here," Mr. Henderson said.

U.S. Sen. Sherrod Brown (D., Ohio) urged GM to cancel plans to import cars from China.

"What's good for GM is no longer good for America," Mr. Brown said. "This idea is a slap in the face to American autoworkers and American taxpayers.

"If officials at General Motors think that U.S. taxpayers will finance cars made in China while American plants are closing, they're either tone-deaf or shortsighted," Mr. Brown said.

GM renewed talks with the UAW last week and is proposing a labor-saving agreement similar to that approved earlier by Chrysler LLC workers, Mr. Rapson told union leaders this week at meetings in Cleveland, according to people who attended the sessions or were briefed by participants.

GM has proposed that the UAW swap $20 billion in the automaker's obligations to a union health-care fund for $10 billion in cash paid out over an unspecified period, as well as equity equal to 39 percent of a restructured company.