General Motors plans to close factories and ship some US production overseas has become a “real problem” in negotiations with auto workers on concessions, but changes in the company’s business plan are possible, two US lawmakers have said.
Go deeper with GlobalData
Senator Carl Levin, a Michigan Democrat and staunch auto industry ally, told Reuters he thought the Obama administration task force overseeing GM’s restructuring would like the company and the United Auto Workers to reach a deal, rather than force a government-imposed solution.
“I think it’s a real problem but I hope the UAW can negotiate it,” Levin told the news agency as hopes for a quick deal this week appeared to be in question.
“If they can’t, it will be up to the White House as to whether they accept a GM plan which has a reduction of the kind we’re talking about,” Levin said.
GM proposes to close 16 plants and cut 21,000 factory jobs, shifting some production to China, Korea, Mexico and Japan.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe issue raises the political stakes for the administration on preserving US jobs during recession and on corporate outsourcing, especially when GM has received more than US$15bn in taxpayer support since January, the report said.
GM has until 1 June to prove to the Obama autos task force it can be viable or face probable Chapter 11 bankruptcy. It must also agree debt reduction with bondholders.
Levin and other lawmakers support UAW objections to the business plan and believe changes to it are possible as negotiations intensify.
One said GM had indicated everything was negotiable and there was a possibility of some plants staying open, depending on discussions.
GM chief executive Fritz Henderson and UAW president Ron Gettelfinger met with administration officials on Tuesday for a second straight day at the Treasury after meeting at the White House for the announcement of the administration’s new fuel efficiency and emissions programmes.
Other industries that employ millions of workers and other unions are standing behind the automakers but not at the expense of losing more jobs overseas.
These include steelmakers, the container industry, tyre and rubber manufacturers, trucking and paper firms.
Automakers are the second-largest user of carpeting behind home builders, the report noted.
