Report: UAW trust to get 17.5% of GM shares
DETROIT -- General Motors will give the United Auto Workers union 17.5% of its common stock, $6.5 billion of preferred shares and a $2.5 billion note to finance a trust that will take over retiree health care costs starting next year.
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% 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 next 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 the company's June 1 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.
Mike Green, president of a UAW local at a Cadillac factory in Lansing, Mich., said the leaders know it's better to have an agreement in place in case GM is forced into bankruptcy. Union members will vote on the concessions Wednesday and Thursday.
"If you don't ratify it, you go into bankruptcy court with nothing," Green said. "If you go in with this, at least you have an agreement here. It's a good-faith agreement."
