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Even though GM appears headed toward bankruptcy, the company has a tentative restructuring plan with the United Auto Workers. A union trust fund will get up to 20 percent of GM's stock. In exchange, the UAW will make concessions on wages and health care for retirees. As Tracy Samilton of Michigan Radio reports, most UAW members appear likely to ratify the agreement even though they don't like it.
TRACY SAMILTON: More than a hundred retired and active GM workers crowd into Local 22 in Detroit this morning to hear about the union's tentative agreement with the company. The deal is no longer to keep GM out of bankruptcy but to protect the union's interests in bankruptcy. Mary Miller(ph) worked for GM for more than 30 years. She says it will be hard to do without her vision and dental coverage.
Ms. MARY MILLER (GM Retiree): But I guess we have to live with it. And I'm sure not happy about paying $50 for name brand medication.
SAMILTON: There will also be uncertainty about what will happen to retiree health insurance altogether. GM owes the union $20 billion for the retiree health care trust. The union will instead take about 20 percent of stock in the new GM. Meanwhile, unsecured bondholders flatly rejected GM's offer of a 10 percent stake in the company. Retiree John Grisom(ph) says he understands many GM bondholders aren't Wall Street fat cats.
Mr. JOHN GRISOM (GM Retiree): They're in the same boat we are. And they might as well understand this - they might as well understand this. I understand you took all the money that you'd saved, and bought bonds with it for General Motors, I understand that. And it hurts when you have - you based your retirement and the rest of your life on this money. But so did I.
SAMILTON: There's an air of resignation about the cuts and most people here say they'll vote to ratify the deal on Thursday, because to vote no puts every GM and pension at risk of disappearing. Retired GM worker Jack Dalton(ph) says he hopes people understand that UAW members, like the song says, are just trying to get by.
Mr. JACK DALTON (GM Retiree): Now listen Mr. President, all you Congressmen too: You got me all frustrated, I don't know what to do. I'm trying to make a dollar, I can't even save a cent. It takes all my money to eat, sleep and pay my rent.
SAMILTON: Union leaders, like Local 22 Vice President Tom Summers, are reluctantly but strongly recommending that workers ratify this deal. He says the reality is, in GM's precarious situation, the union has no choice.
Mr. TOM SUMMERS (Vice President, Local 22, UAW): I've got 35 years, all right? And I've seen GM ups and downs, okay, through the course of the years - '70s, '80s, '90s - but they always bounce back, all right? This is a whole new ballgame.
SAMILTON: Ratification is almost certain. But having a deal in place ahead of time is no guarantee of a smooth bankruptcy proceeding, especially if bondholders hold out. Independent auto analyst Eric Merkel(ph) says Chrysler's bankruptcy is going faster than people thought it could, but GM is a very different company.
Mr. ERIC MERKEL (Independent Auto Analyst): The real risk here is that, does it - can a GM bankruptcy be done within 60 days, because the longer it goes on, the less - the more confidence you lose with the supply base, with your customers with your dealers. And then you've got some real problems.
SAMILTON: The union will announce tomorrow if members ratified the deal. Meanwhile, negotiations between the US Treasury and GM's nearly ten thousand bondholders are being kept quiet. And depending on those negotiations a GM bankruptcy filing could be imminent.
For NPR News, I'm Tracy Samilton in Ann Arbor.
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