GM Reaches Agreements With UAW & CAW
The United Auto Workers (UAW) and Canadian Auto Workers (CAW) represent the two most important labor unions for GM’s North American operation. Whatever GM’s fate ends up being as it goes through likely bankruptcy restructuring, the two unions will play an important role in the company going forward.
Agreements Reached With Key Unions
Yesterday GM reached a tentative agreement with the UAW and today with the CAW in a bid to get some of their labor costs in line. Though both unions have been giving back to GM for some time, the automaker’s current plight required that GM revisit the union contract once again.
Regarding their agreement with the UAW, GM noted — Changes to the collective bargaining agreements are subject to ratification by UAW membership and approval by GM’s board of directors. The tentative agreements are consistent with the conditions and disclosures made in GM’s prospectus and supplements to the prospectus for the pending exchange offers to bondholders. The financial impact of the terms of the agreement are not expected to be materially different from the viability plan estimates included in the documents for the exchange offers. Details of the definitive terms of the tentative agreement are not expected to be publicly disclosed by GM until after member ratification is complete.
Government Assistance Waiting In The Wings
The CAW accord is also important because with it both the province of Ontario and the Canadian federal government can now provide aid for GM’s Canadian operations. Both governments demanded union concessions which made it easier for GM to extract additional give backs from the normally difficult to work with Canadian union.
UAW workers must still ratify their contract with a similar arrangement forthcoming from CAW workers too. Though neither move will guarantee that GM will survive for the long haul, refusing to concede would likely have meant additional layoffs and plant closings, perhaps requiring the complete sell off of GM assets via liquidation.
Source: General Motors
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