DETROIT (AP) -- General Motors Corp. will give the United Auto Workers union up to 20 percent of its common stock, $6.5 billion of preferred shares and a $2.5 billion note to fund a trust that will take over retiree health care costs starting next year.
The union's trust will also get a seat on GM's new board of directors, although that seat will have to vote at the direction of the other independent directors.
The funding is part of a tentative agreement that union members will vote on this week as GM tries to pull together the remaining pieces that would allow it to restructure outside of bankruptcy.
Members of the Canadian Auto Workers union approved wage reductions and other concessions Monday, but GM's unsecured bondholders have resisted an offer to take a 10 percent stake in the company to wipe out $27 billion in debt. Analysts say it's unlikely enough bondholders will approve the offer, meaning GM would still be forced into bankruptcy protection by Monday.
Plant-level union officials met in Detroit on Tuesday to hear details of the agreement that GM, the UAW and the government reached last week. Several local presidents said after the briefing that they voted unanimously to recommend that members approve the concessions.
Local union leaders said the 14 factories that GM intends to close were not identified in the agreement or by UAW international officials. Those are part of GM's restructuring plan to be submitted to the government by a Monday deadline, said one of the officials, who spoke on condition of anonymity because the details of the meeting have not been presented to union members.
The company did commit to reopening three closed assembly plants and one stamping factory if demand warrants, according to the summary sheet. The factories were not identified. more...
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