Facing a looming June 1 deadline to reach agreements with the bondholders and union, General Motors may have failed to come to terms with the former, but it has reportedly arrived at a tentative concessions agreement with latter. The deal puts the United Auto Workers' trust fund in charge of future health care costs in exchange for a 17.5% stake in the reorganized General Motors. The U.S. Treasury is still expected to take the controlling stake in the reorganized company.
Delphi had given the UAW two different proposals, neither of which the UAW felt it could take to its membership. The UAW's counterproposal on wages and benefits was only ten pages long, but is so complicated that it will take a while yet for Delphi to really sort out what it really means. Coming to an agreement with the UAW is essential for Delphi to emerge from bankruptcy as a recapitalized company. However, the UAW knows that if it gives any more concessions to Delphi, the big three automakers
Mitsubishi Motors Corporation and PSA Peugeot Citroën have announced that they have signed an agreement that will see PSA Peugeot Citroën supplying Mitsubishi with diesel engines. The agreement is an extension of an existing arrangement struck between the companies last year to develop a new SUV platform. We covered Mitsubishi's interest in entering the clean diesel market in our powertrain technology wrap-up.
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