Published: May 26, 2009 02:37 pm      

DELPHI: GM taking ownership of plant, four others

DETROIT (AP) — General Motors Corp. will give the United Auto Workers union 17.5 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 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 next Monday.

Plant-level union officials met in Detroit on Tuesday to hear details of the agreement 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.

The Associated Press obtained a summary of the agreement, which also gives the union trust fund a warrant for another 2.5 percent of GM’s stock.

The summary says most of GM’s 61,000 hourly workers will get another buyout and early retirement offer, this one sweeter than the most recent one.

Production workers will be offered $20,000 plus a $25,000 car voucher for early retirement, while skilled trades workers will get $45,000 plus the car voucher.

Buyout packages include $115,000 and the car voucher for employees with 20 or more years of service. Those with less than 10 years would get $45,000 and the car voucher to leave the company.

The summary also says GM will take back five facilities from Delphi Corp., its former parts arm now in Chapter 11 bankruptcy protection.

GM will take ownership of Delphi Saginaw Steering in Saginaw, Mich.; Delphi Thermal Systems in Lockport, N.Y.; Delphi Powertrain in Rochester, N.Y.; Delphi Powertrain Systems facilities in Rochester, N.Y., and Grand Rapids, Mich.; and Delphi Electronics and Safety in Kokomo, Ind.

Officials from UAW locals that represent Ford Motor Co. workers also attended Tuesday’s 2 1/2-hour GM meeting to find out details of the concessions.

Ford already has reached a deal with the union to cut labor costs, but GM’s agreement has far steeper cuts. Ford officials have said they will seek further changes so that its deal with the union is similar to GM’s agreement.

General Motors has been trying to overhaul its business so it can keep receiving federal money to stay afloat as it deals with soaring costs and slumping sales. On Friday, the Detroit automaker borrowed $4 billion more from the federal government on top of the $15.4 billion it has already received.

GM also plans to announce the closing of 14 more factories as part of its previously announced effort to shutter 16 plants to trim production and cut costs. The moves will lay off 21,000 workers.

Two of the 16 closures have been announced previously: an engine plant in Massena, N.Y., and a parts stamping plant near Grand Rapids, Mich. The locations of the other plants have not been released and they were not included in the contract details released Tuesday.