UAW to suspend jobs bank, rework healthcare trust

DETROIT (Reuters) - United Auto Workers President Ron Gettelfinger said on Wednesday the union would surrender job security protections and delay payments into a retiree healthcare trust to help U.S. automakers clinch government aid to survive a sales downturn.

Gettelfinger also said the UAW would consider other changes to contracts reached in 2007 with General Motors Corp GM.N, Chrysler CBS.UL and Ford Motor Co (F.N).

Details of the concessions on jobs bank program and delayed payments to the health care trust still need to be worked out, but quick action is expected. Some changes may require approval of UAW members, others may not.

All three Detroit-based automakers said Tuesday that they needed new concessions from the union in restructuring plans submitted to Congress seeking a combined $34 billion of aid.

GM asked Congress for $18 billion of aid, including $4 billion by the end of December to avoid collapse, while Chrysler sought $7 billion by the end of the month as well.

Ford, widely seen as the strongest of the three, said it was seeking a $9-billion line of credit as insurance in part against the collapse of one of its rivals.

The union and automakers reached agreement last year on contracts that created a Voluntary Employee Beneficiary Association, or VEBA, to take over an estimated $80 billion of retiree healthcare liabilities starting in 2010.

Easing the pressure on automakers from extremely high retiree health care costs was seen at the time as the single biggest concession the union could offer the companies.

Gettelfinger said the payment schedules for the 2010 VEBA would be deferred to a later date.

Lazard is advising the union on the VEBA program. It also was the adviser to the UAW during the contract talks.

Gettelfinger told a news conference the steps were the "responsible thing to do" and the union was currently engaged in discussions with the automakers to modify the contracts, rather than reopen them.

Gettelfinger spoke at a Detroit hotel after a hastily arranged meeting with union officials who represent workers at the Detroit automakers.

The jobs bank has been "a lightning rod" for criticism that has shifted focus from the real issues, he said.

The jobs bank pays nearly full wages and benefits to workers idled by plant closures, but the union had agreed to sharp limits on the program in its 2007 contracts with automakers.

Gettelfinger said he was not calling on the Canadian Auto Workers union to make similar moves.

General Holiefield, a vice president who oversees UAW ties to Chrysler, told reporters changes are always difficult for members, but he believed workers understood the situation.

"If we don't have factories, our contract will not mean anything," Holiefield said.

Jeff Manning, president of UAW Local 31 whose members work at a Fairfax, Kansas plant where GM builds the Chevrolet Malibu and Saturn Aura sedans, called the meeting constructive.

"We will follow the lead of the union leadership," Manning said.

(Reporting by Poornima Gupta and Soyoung Kim, writing by David Bailey, Editing by Maureen Bavdek, Richard Chang and Tim Dobbyn)