UAW to modify contract, scale back jobs bank

United Auto Workers President Ron Gettelfinger emerged from an emergency meeting with local leaders in Detroit this afternoon to say his union would seek to modify its contract with the Big Three automakers as a way to help them negotiate a $34 billion federal loan package with Congress.

The union, which made dramatic concessions in a 2007 contract, says it will seek approval from membership for a scale-back of its controversial and costly jobs bank program — dubbed a “lightening rod” for criticism by Mr. Gettelfinger — which pays laid off workers nearly their full salaries while off the job. They also will consider moving the date on funding for a retiree heathcare trust, set to pay out in 2010, which would cost the automakers billions. The UAW’s 2007 agreement created a Voluntary Employee Beneficiary Association (VEBA), which would cover about $80 billion of healthcare liabilities for retirees. Those pay-outs would be deferred to a new date, he said.

“We are going to move forward,” Mr. Gettelfinger said at a press conference at Detroit’s Renaissance Center, as he urged Congress to move forward quickly on a decision about the auto loans. “We’ve never made this an issue about the UAW or the companies. We’ve always said Main Street, side street and rural America are all impacted by what the Congress of the United States does. We’re asking for a loan here … a loan to be repaid.”

General Motors Corp., Ford and Chrysler had sought new union concessions as a part of their restructuring plans that were submitted to Congress. GM is seeking $18 billion in aid, while Chrysler has asked for $7 billion and Ford, $9 billion. They automakers are seeking help by the end of the year to avoid a collapse of the industry, which includes credit-strapped suppliers as well as dealers.

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