4 Dec 2008

Auto union makes key concessions

8:29 am on 4 December 2008

The United Auto Workers union says it is willing to make key concessions in order to help the "Big Three" Detroit carmakers secure government aid.

General Motors, Chrysler and Ford have pledged to cut costs dramatically to get a rescue deal, but need union support to deliver the cuts.

The union has agreed to modify the jobs bank, where workers who lose their jobs continue to get paid.

It also said it would delay payments into a union healthcare fund.

The BBC reports exact details of the concessions have not been finalised, but the package, potentially worth up to $US34 billion, is more likely to be agreed by Washington.

Earlier on Wednesday, US House Speaker and California Democrat Nancy Pelosi stated that General Motors, Chrysler and Ford will get government aid, one way or another. She said bankruptcy was not an option.

Chrysler and General Motors have asked for loans of up to $US25 billion and may not survive without them. Ford has asked for $US9 billion should it be needed.

However, the White House said it would take its time in making a decision and Congress is not yet convinced.

The three companies have pledged to slash costs, reduce levels of debt and invest in greener technologies in order to secure the bail-out funds.

The chief executives of Ford and GM have even offered to work for $US1 a year if Congress approves the emergency aid.

Sales at all three carmakers have plunged as US consumers tighten their belts in the face of the severe economic downturn.