Union gears up for negotiations with GM, Chrysler

DETROIT (Reuters) - United Auto Workers bargaining teams are arriving this week in Detroit as the union gears up for negotiations with General Motors Corp and Chrysler LLC, which are mandated to cut labor costs under a $17.4 billion federal bailout.

UAW leaders were converging for a series of internal meetings to prepare for talks with the automakers, who have until March 31 to wrangle steep labor-cost concessions from the

UAW.

Targeted concessions include making company contributions to a retiree healthcare trust half cash and half stock instead of all cash, making UAW wages competitive with foreign manufacturers by December 2009, and eliminating the union jobs bank, which pays laid-off workers, sometimes for years.

The UAW's bargaining team for GM held an internal meeting on Tuesday, said UAW spokeswoman Christine Moroski.

The negotiations come just over a year after the union signed a four-year labor cost-cutting contract with all three Detroit automakers that allowed the companies to hire new workers at lower wages and benefits, and paved the way for them to shift their retiree healthcare liability to a UAW-administered trust.

"We'll sit down and have discussions along the lines of things we could do in the contracts and have that ratified without opening the contracts," UAW Ron Gettelfinger told Automotive News in an interview on Tuesday. The comments were confirmed by spokeswoman Moroski.

The UAW internal meetings come as automakers are gearing up for the 2009 North American International Auto Show, which begins Sunday.

GM and Chrysler received $17.4 billion in federal loans in December after the companies said they were running out of cash and had come close to the minimum funds needed for running their operations.

GM CEO Rick Wagoner said last month he was confident the company could meet the conditions attached to the emergency loans and that GM has always had good relations with its unions. But he also acknowledged there was plenty of work to be done.

Chrysler owner Cerberus Capital Management LP said it would contribute its equity in Chrysler automotive to labor and creditors as currency to facilitate the restructuring.

The other Detroit carmaker, Ford Motor Co, has not sought any loans from the government, saying it has enough near-term liquidity. However, Ford is seeking a $9 billion credit line to be tapped if needed.

Mark Fields, Ford's president of the Americas, on Monday declined to say whether Ford would seek to match any concessions GM or Chrysler might receive from the UAW.

"We have a great relationship with the UAW and we have daily conversations with the UAW about the state of the business and about the need for competitiveness versus the rest of the industry," Fields told reporters. "It's a continual process, not a sporadic one."

(Reporting by Poornima Gupta and David Bailey; editing by John Wallace)