UAW chief urges $25 billion in U.S. auto support

By Kevin Krolicki

DETROIT (Reuters) - United Auto Workers President Ron Gettelfinger on Thursday urged the U.S. government to provide another $25 billion in loans to struggling U.S. automakers so that they can meet their healthcare obligations to over 780,000 retirees and their dependents.

"The U.S. Treasury and the Federal Reserve can help immediately by taking steps to provide liquidity to auto manufacturers so they can get through the difficulties caused by an across-the-board decline in auto sales," Gettelfinger said in a statement released by the union.

Gettelfinger joined the chief executives of General Motors Corp, Ford Motor Co and Chrysler LLC in meetings on Thursday afternoon in Washington with House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid to plead the case for urgent aid to the embattled auto industry.

Gettelfinger called those meetings "constructive." He said the UAW looked forward to meeting with President-elect Barack Obama "in the near future" to discuss the same issues.

The UAW backed Obama, and the union campaigned for him in key states like Michigan, Ohio and Indiana where its active membership is concentrated.

"There is an urgent need for federal assistance -- not just for our members, but for millions of workers and retirees and for thousands of companies who depend on the auto industry for jobs, retirement benefits and revenue," Gettelfinger said.

Gettelfinger said a rescue package for automakers would be less costly for taxpayers than the alternative, which the industry's allies have warned could include a cascade of business failures by automakers and their suppliers.

"Strategic assistance to a critical manufacturing industry makes sense for U.S. taxpayers," said Gettelfinger. "The alternative is lost jobs, business failures and a shortfall in pension and healthcare obligations -- all of which will cost far more in the future than the assistance we are requesting now."

Although the union has backed proposals for federal support for the auto industry, it has also urged steps to ensure that any funding is used to protect benefits for its retirees.

The UAW agreed to cost-saving labor contracts with Detroit automakers in 2007 that shift the cost of providing retiree healthcare to a trust fund allied with the union. But that trust will not begin operations until 2010 under the terms of the union contracts.

(Reporting by Kevin Krolicki; Editing by Phil Berlowitz, Gary Hill)