(Adds comments on automakers, details, background and byline)
By Poornima Gupta
DETROIT Nov 15 U.S. automakers urgently need a
federal loan to survive, United Auto Workers President Ron
Gettelfinger said on Saturday, but their work force should not
be blamed for the industry crisis.
Gettelfinger, in a rare news conference, said General
Motors Corp (GM.N), Ford Motor Co(F.N) and Chrysler LLC were a
critical part of the economy and needed the aid before
President-elect Barack Obama takes office in January.
"We need to get this bridge loan and we need it in this
lame duck session," he said, referring to next week's
congressional session during which lawmakers will discuss
emergency aid for the "big three" car companies.
Gettelfinger said it was unfair to blame UAW workers and
retirees for the problems facing U.S. automakers.
"We have made dramatic, dramatic changes," he said,
referring to concessions UAW made in its contracts with the
A health-care trust fund, known as a voluntary employee
beneficiary association, is the centerpiece of a cost-cutting
contract that the UAW negotiated with the automakers last
The trust fund will take effect in 2010 and is expected to
cut costs for the automakers by covering health care costs for
more than 700,000 UAW-represented workers and retirees.
Detroit automakers have sought emergency assistance to help
them survive a steep and worsening drop in sales that they
blame on the global credit crisis and slumping economy.
GM has said it could run out of cash by early next year.
Rep. Barney Frank, chairman of the House of Representatives
Financial Services Committee, is holding a hearing on Wednesday
on legislation to extend up to $25 billion to GM, Ford and
Chrysler. GM CEO Rick Wagoner, Ford CEO Alan Mulally, Chrysler
CEO Bob Nardelli and Gettelfinger are expected to testify.
'WE'RE ON THE CLIFF'
U.S. automakers have been hammered by the slow U.S.
economy, tight credit markets and a decline in consumer
confidence, Gettelfinger said.
"If it weren't for these issues, we wouldn't be having this
problem," he said.
GM, Ford and Chrysler are burning through cash amid a
global credit crunch that has accelerated the decline in U.S.
auto sales to near 25-year lows and placed severe limits on
corporate and consumer borrowing.
Gettelfinger said there was a real possibility that one of
the automakers would fail in the absence of an immediate cash
infusion. He characterized any federal aid as a low-cost loan
rather than a bailout.
"We're on the cliff here," Gettelfinger said, adding that
an automaker bankruptcy would lead to massive job losses.
"During this year General Motors at one time employed more
workers than all of the foreign nameplates operating in this
country," he said. "The big three spends more money on research
and development than NASA."
A bankruptcy at any of the U.S. automakers could lead to
the eventual failure of all three Detroit automakers, he
"Because of the way they are interlaced with the suppliers,
I would say it's a very safe bet that at least two of them
would go and possibly all three would go," the UAW president
Gettelfinger said that he was hopeful that automakers would
get help from the government.
The UAW, which threw its weight behind President-elect
Barack Obama during the campaign, was instrumental in helping
him win the auto-heavy states of Michigan, Indiana and Ohio.
(Additional reporting by Kevin Krolicki; Editing by Xavier