UAW and GM break off talks

From Bloomberg:

Feb. 14 (Bloomberg) -- The United Auto Workers union is objecting to proposals from General Motors Corp. and Chrysler LLC to modify a retiree health-care fund as required by the U.S. so the automakers can keep $17.4 billion in aid.

The UAW stopped negotiations with GM last night, a person familiar with the talks said. Chrysler still is talking to the union, though the talks haven’t been substantive, said another person briefed on those discussions. A delay in the talks could risk the automakers missing a Feb. 17 deadline to show progress in a government-ordered plan to cut labor and debt costs. It’s not clear what that would mean.

The GM and Chrysler proposals on the Voluntary Employee Beneficiary Association “contradict the explicit terms of the Treasury loan agreements, and would severely hurt retirees,” UAW legislative affairs director Alan Reuther said in an e-mail last night. “These proposals are a non-starter as far as the UAW is concerned.”

The terms of the Dec. 19 loan agreements from the U.S. Treasury require GM and Chrysler to convince the UAW to accept half of scheduled payments into a union-run retiree health-care fund next year in equity instead of cash. The automakers are also seeking to eliminate supplement unemployment pay and change plant work rules to trim labor expenses.
...
The automakers are also asking the union to end a 54-year- old benefit that ensures almost full pay during layoffs.

The so-called “supplemental unemployment benefit,” or “SUB” pay, gives laid-off workers most of their take-home wages. Automakers and the UAW are discussing the future of the program, said people familiar with the talks, who asked not to be named because the negotiations are private. The UAW isn’t negotiating cuts in core wages or benefits, the people said. ...

Article here. With the Feb 17th deadline looming, this is a game of high-stakes chicken between the UAW and GM.