GM, UAW talks resume as deadline looms
DETROIT (Reuters) - Talks between General Motors Corp and the United Auto Workers were set to resume on Sunday with just two days to go before a deadline for the struggling automaker to submit a new restructuring plan to the U.S. government.
Union negotiators in Detroit walked away from the bargaining table on Friday over differences with GM over the central issue of how to fund retiree health-care costs.
But by Sunday afternoon, both negotiating teams were set to meet and resume talks, a person briefed on the situation said.
Meanwhile, GM and a committee of its bondholders were locked in high-stake talks aimed at reducing debt at the struggling automaker by about $18 billion.
If GM cannot win the deals it is seeking to cut its debt and costs, the automaker is certain to face new pressure to consider filing for bankruptcy or to plead for an expanded bailout from the Obama administration.
GM and Chrysler LLC, are required to submit restructuring plans by Tuesday showing how they can be made viable after receiving $13.4 billion in emergency federal funding that has kept them operating since the start of the year.
Both automakers say they expect to meet the cost-cutting and competitiveness targets set out under the bailout. UAW representatives could not be reached for comment.
A senior White House adviser said on Sunday that sweeping and shared sacrifices by creditors, labor and executives were needed to allow automakers to emerge from the current crisis.
"That's going to involve concessions on the part of everyone, not just the auto workers, but shareholders, creditors and, of course, the executives who run the company," President Barack Obama's senior adviser David Axelrod said on "Fox News Sunday."
A parallel set of talks between Chrysler LLC and the UAW has also been under way, but the smaller automaker had made little progress as of Saturday, a person briefed on those talks said.
GM debtholders on a 10-member committee, including Franklin Templeton Investments, Fidelity Investment and Loomis Sayles & Co, remain in talks spurred by a requirement that the automaker reduce $27.5 billion in debt to about $9 billion by exchanging the debt for equity.
A person involved in those discussions said they were likely to run to the brink of the Tuesday deadline as creditors press for more favorable terms.
GM has received $9.4 billion from the U.S. Treasury and has been promised another $4 billion more if it can demonstrate that it can be made viable by slashing costs and debt.
Like bondholders, the UAW is being pressed to accept stock in a recapitalized GM in exchange for debt forgiveness.
The UAW is owed roughly $20 billion from GM for a retiree health-care fund. It faces pressure from GM to take half of that in equity in a recapitalized company. Continued...
