Reposted from www.laborradio.org
As millions of workers whose jobs depend on them anxiously await government action this week on more loans for GM and Chrysler, President Obama is expected to announce that more money will flow to the U.S. automakers.
But Obama says the companies have work to do on their cost-cutting restructuring to be sustainable for the future. That will mean more painful sacrifice from a unionized workforce that has already given huge wage and benefits concessions.
A painful sacrifice not demanded of the fat-cat employees of AIG and other financial institutions. The federal government announcement expected Monday will demand more concessions from union workers, bondholders and others in the auto industry in order to get more federal loans.
The threat of possible bankruptcy still hangs over both U.S. auto companies. GM and Chrysler have gotten over $17 billion in government loans. GM says it needs another $16.6 billion, Chrysler another $5 billion to get them through this recession. The UAW is still negotiating with GM and Chrysler over funding for retiree health care.
Late-breaking details on Obama’s auto industry plan: The Obama administration auto task force has rejected the viability of plas of both GM and Chrysler and is threatening ‘structured bankruptcy’ for both companies unless they can reach deals to become viable entities. GM is reportedly being loaned ‘adequate capital’ from the government for 60 days to come up with more cost-cutting and to re-work a viability plan.
Chrysler, the President is expected to announce, is not viable as a stand-alone company and has until April 30 to cut a deal to merge with Fiat. If that deal fails , the government will not loan Chrysler any more money. The Obama administration says a ‘structured bankruptcy’ is still possible for one or both companies so they can ‘get rid of old liabilities’ – meaning pensions and health care for retirees are at serious risk. GM CEO Rick Waqoner is also being forced out.
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