Not that it should come as a major shock to anyone paying attention over the last few weeks, but in a regulatory filing submitted by General Motors on Tuesday, the beleaguered automaker has admitted that it's unlikely to have acceptable deals negotiated with the either the United Auto Workers or Canadian Auto Workers unions before the previously announced deadline of May 27.

Equally as unsurprising are rumors that GM's plan to begin importing 50,000+ cars from China by 2014 is one of the major stumbling blocks in UAW negotiations. Other sticking points surely include how best to slash the desired $1 billion in annual labor costs that the two parties reportedly targeted and how to fund the Voluntary Employees Beneficiary Association (VEBA) health care trust.

Furthermore, the Detroit Free Press is reporting that CAW union leaders are upset at the way they are being treated in negotiations. A flier passed out to Canadian union workers had this to say:

"Because the Canadian and U.S. governments are planning a joint effort to support GM's restructuring, we now face a dangerous attempt to enforce a 'cookie-cutter' approach on our bargaining. This philosophy is absolutely offensive to us as Canadians."

More than ever before, it seems almost a foregone conclusion that GM will file for bankruptcy on June 1st. Hold on tight, this promises to be a wild ride.

[Source: Detroit Free Press | Image: Bill Pugliano/Getty]

Depending on who you choose to listen to, General Motors and the United Auto Workers are either close to forging an important concessions deal, or they're still squabbling over GM's plans to sell imported vehicles to U.S. consumers.

GM and the UAW are in talks trying to slash $1 billion in annual labor costs, with reports stating that the plan would give the union a 39% stake in GM to help fund the Voluntary Employees Beneficiary Association (VEBA) health care trust. GM already has around $15 billion invested in the VEBA, but it is still on the hook for some $20 billion. If reached, the new deal would reportedly cut that figure in half.

The agreement, which the Wall Street Journal says could be reached as soon as this week, will still need to be voted on by the UAW's 60,000 GM employees, who themselves also face upwards of 20,000 more job layoffs as well as more wage and benefit cuts.

Conversely, the Associated Press is reporting that the issue remains very much in doubt, with GM and UAW negotiators battling over GM's plans to sell vehicles built overseas – namely those from China – in the U.S. While GM officials reportedly say that the balance of vehicles it makes and sells in the U.S. will not change, UAW officials are rankled that its members face 16 more plant closures and a slate of givebacks. In fact, according to the AP, the UAW is so upset that it has sent an email to its members asking them to voice their displeasure by contacting President Obama.

[Sources: The Wall Street Journal; The Associated Press | Image: Spencer Platt/Getty]

According to a post on The Detroit Bureau, a key stipulation in the tentative contract reached between the United Auto Workers and Chrysler is that the union's right to strike will be all but eliminated for at least the next few years.

As quoted in the story, Harley Shaiken, a labor relations specialist at UC-Berkeley, notes that the so-called "no strike" portion of the agreement was arrived at "in the context that it will take anywhere from three to five years for this company to recover." According to TDB, the provisos of the bridge loan means that a strike would be viewed as a default on the agreement, including any local strikes.

The same contract apparently calls for binding arbitration (instead of strikes) on financial issues for any contract arrived at in 2011, and the same arrangement will be in effect in 2015 if Chrysler still owes money to the Treasury Department.

The contract goes in front of the UAW's 28,000+ members for a vote today. Click on the link below for more details.

[Source: The Detroit Bureau | Source Image: Bill Pugliano/Getty]

According to a story from The New York Times, the Treasury Department and Chrysler are readying Chapter 11 bankruptcy documents for filing as early as next week.

The report goes on to say that the filing carries with it an "agreement in principle" with the United Auto Workers that would protect members' benefits packages, including pension and retiree health care obligations.

Whither Fiat? Apparently, the Italian automaker is still very much in the picture, although under this arrangement, it would not reach its stake-holding deal until after Chrysler is already in bankruptcy court. The big outstanding question is where this leaves Chrysler's lenders, who are owed nearly $7 billion.

Some industry watchers are apparently wondering aloud if the bankruptcy filling preparation work is merely a ploy to turn the screws on lenders, who have balked at previous proposals designed to reduce Chrysler debt. More details at the link below.

UPDATE: Chrysler's response to the NYT article is posted below the fold.

[The New York Times | Image: Bill Pugliano/Getty]

The Ford Motor Company has announced that it has completed more of its financial restructuring initiatives, lessening its debt by some $9.9 billion (from a starting place of $25.8 billion at the end of last year). The company says this move will lower its annual interest costs by more than $500 million. Ford and its financing arm, Ford Credit, are using 468 million shares of stock and $2.4 billion in cash to reach that figure.

Other parts of the company's debt restructuring efforts include the tendering of approximately $4.3 billion in Senior Convertible Notes (not due until December 15, 2036) for purchase related to Ford's conversion offer, along with previously announced gains like its revised agreements with the United Auto Workers and a cash tender offer for the company's unsecured, non-convertible debt securities. For the full gorey financial details, you number crunchers can click on the jump to check out Ford's official press releases.

[Source: Ford Motor Company | Image: Spencer Platt/Getty]

According to The Detroit News, the United Auto Workers is giving its blessings to a potential Chrysler-Fiat tie-up. Chrysler honcho Bob Nardelli earlier pegged the possible union as a $10 billion bonanza for Chrysler, since the Pentastar would save money on developing a range of platforms, engines, and cars. The UAW's interest is, of course, the job savings: the partnership has been said to be worth 5,000 jobs that might otherwise be lost.

But with current timelines, the question is where Chrysler and the UAW will be by the time such a partnership gets to the next stage. Fiat expects to complete its due diligence of Chrysler by the end of this month. But by that time, Chrysler will need to have secured concessions from the UAW and bondholders in order to get additional money from the U.S. government. Whether it will get the concessions from both parties – and what the government will do when it comes time to write a check – are all things that remain to be seen.

[Source: The Detroit News]

Despite rumors to the contrary, United Auto Workers President Ron Gettelfinger is getting off the merry-go-round in 2010. The embattled union head honcho had been rumored to be considering seeking a third four-year term, but Gettelfinger himself has since gone on record saying that such notions are "totally untrue and totally unfounded." Instead, he will retire at age 65 next year in accordance with UAW policies.

There is no word yet on who will replace Gettelfinger next year, and if the current economic and auto industry malaise continues, whoever succeeds him will assuredly be stepping into a very difficult position. In the meantime, Gettelfinger will continue to work with the Detroit 3 and other union officials to try and protect worker benefits and compensation packages.

[Sources: DowJones via CNNMoney.com; Detroit News | Image: Bill Pugliano/Getty]

Yesterday, General Motors announced plans for another round of buyouts. Initial reports said the automaker would offer workers 50 years of age and older $20,000 cash and another $25,000 voucher towards the purchase of a GM vehicle. However, the Associated Press is now reporting that GM will offer every one of its hourly workers the opportunity to expand their career options. A UAW official confirms to the AP that the offer will be a one-time cash payout as well as a car-purchase voucher, but would not discuss specific amounts.

The same official said the buyout details should be announced by GM on Friday and employees would have until March 23 to stay with the company or begin looking at ways to make that $20k last until retirement. Takers of the buyouts would have until April 1 to clear out their lockers.

[Source: AP]

Earlier this morning, United Auto Workers president Ron Gettelfinger held a press conference in which he pointed the finger of blame back at Senate Republicans, particularly ones from Southern states in which many foreign-owned auto assembly plants are located, for the failed attempt last night to pass the Auto Rescue/Bailout Bill in the Senate. As we mentioned earlier, negotiations fell apart over the issue of wage parity, or what Senator Bob Corkey (R-Tenn.) called "competitive wages".

Gettelfinger claims the UAW was willing to make its wages and benefits competitive with those earned by non-union workers at transplant factories, but felt it must be done over time through the attrition of older, higher-paid workers and the hiring of new workers at a lower wage with less benefits. Despite this concession by the UAW, Senate Republicans demanded that wages and benefits be made competitive by what it calls an "arbitrary date", likely March 31, 2009.

It seems like a minor issue to stall such an important piece of legislation, which may lend credence to Gettelfinger's suspicion that the UAW was "set up" as a scapegoat by Senate Republicans who have it out for organized labor.
[Source: The Detroit Free Press, MSNBC, Photo by Bill Pugliano/Getty]

As you read this, there are about 3,000 unionized workers -- down from about 15,000 two years ago -- employed by the Detroit 3 getting paid, despite the fact that they aren't working. While it's nice for America's automakers to have access to a talent-pool of available workers, it's also a major financial drain on an industry that's already reeling from a distinct lack of profits. And with new cutbacks and layoffs being announced almost daily, these "job banks" are increasingly tough to justify, even for the UAW. It's always been a bit of a competitive disadvantage, at least on paper, as non-UAW competitors like Honda, Toyota, Nissan and Hyundai do not keep such job banks. To ease Detroit's transition from bloated, money-losing corporations to lean "right-sized" competitors, UAW Prez. Ron Gettelfinger has brought up the job banks and their possible elimination. Will this be a part of the overall plan to become competitive that the Detroit 3 bring to Congress? We'll find out soon enough.

[Source: Wall Street Journal]