G.M. in Deal with Union as Deadline Approaches
Despite warnings of failure only a few days ago, automaker G.M. and the United Auto Workers union (UAW) came to a contract agreement Thursday, giving the company four days to convince its bondholders to retire their debt in exchange for shares in the restructured G.M. Details of the agreement are being withheld until after the ratification vote of the UAW's 61,000 members to be held next week. It appears though that the company will fund the retirees' health care trust, and that the union agreed to accept half of that money in company stock. It is not known if the contract addresses union concerns over foreign imports, and further layoff plans. Hoping to avoid bankruptcy, G.M. now has until Tuesday to persuade 90% of its bondholders to retire debt for company shares - a daunting task. G.M.'s president still recognizes that bankruptcy is "probable" but the company-union compromise gives G.M. a better shot a survival.
See "G.M. in Deal with Union as Deadline Approaches", Bill Vlasic, The New York Times, May 21, 2009