Page last updated at 03:32 GMT, Thursday, 4 December 2008

Auto union makes key concessions

GM trucks
The troubled US carmakers are being forced to make more green cars

The United Auto Workers union says it is willing to make key concessions to help the Detroit Three carmakers secure vital US 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 agreed to modify the jobs bank, where workers who lose their jobs continue to get paid.

The CEOs of the three companies are set to attend Congressional hearings.

The hearings over the coming two days will examine the bosses' request for a total of up to $34bn (23.1bn) in emergency loans.

Their essential message is that if GM, Chrysler and Ford are allowed to go bankrupt, millions of jobs in support services around the nation will be lost, says the BBC's North America editor Justin Webb.

Ron Gettelfinger
Are we going to blame the auto workers... or are we going to take a look at what's happened to our economy, to the housing crunch?
Ron Gettelfinger
United Auto Workers president

President-elect Barack Obama is sympathetic to the car companies if they can provide a convincing case that they have mended their gas-guzzling ways.

But he is not in power until 20 January, and for the weakest of the companies, General Motors, that could be too late, our correspondent says.

Unclear details

The UAW has also said it would delay payments into the union healthcare fund.

Such concessions mean the bail-out package is more likely to be agreed by Washington.

The exact details of the concessions have not been finalised.

"We're a little unclear on some of the details," said union president Ron Gettelfinger.

He did, however, make it clear that his union had little choice in making concessions.

"Let's look at the millions of jobs that will be lost in this country if we lose this industry," he said.

Mr Gettelfinger also expressed his frustration with the "double standards" that led Washington to agree to a $700bn bail-out package for the financial sector but rebuff initial pleas for help from the auto industry.

"Are we going to blame the auto workers... or are we going to take a look at what's happened to our economy, to the housing crunch... and the failures on Wall Street?" he said.

Waiting game

Earlier on Wednesday, US House Speaker and California Democrat Nancy Pelosi stated that General Motors, Chrysler and Ford would get government aid, one way or another.

"It's pretty clear that bankruptcy is not an option," she said.

Chrysler and General Motors have asked for loans of up to $25bn (16.9bn) and may not survive without them. Ford has asked for $9bn should it be needed.

They will have to wait to hear their fate as the White House said it would take its time in making a decision.

"I wouldn't expect that we'll make an assessment of the plans in the coming days," said White House spokesman Tony Fratto.

Ms Pelosi believes that the government will either approve a loans package for the carmakers, or it will allow them to tap into the $25bn already agreed to help fund investment in green technologies.

Democrats have argued that the carmakers should not be allowed to use this money to avoid bankruptcy.

Ms Pelosi's comments chime with those of Fritz Henderson, president and chief operating officer of GM, who said that bankruptcy would simply erode further consumer confidence in the carmakers.

Serious consequences

But the three carmarkers still have a fight on their hands to convince Congress to agree to the $34bn bail-out package.

Republican Senator Arlen Specter said the mood in Congress was "candidly not supportive", although he acknowledged that the consequences of letting just one of them fail would be "cataclysmic".

The carmakers 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 $1 a year if Congress approves the emergency aid.

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

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