GM won't tackle pension talks with UAW until 2015: executive

Fri Sep 27, 2013 5:37pm EDT
 
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By Ben Klayman

NEW YORK (Reuters) - General Motors Co GM.N will wait until its next round of labor talks in 2015 before negotiating with the United Auto Workers about the automaker's U.S. blue-collar pension obligation, GM's vice chairman said on Friday.

GM's pension obligation to UAW-represented workers in the United States was $71 billion at the end of 2011, the last time the Detroit company detailed its blue-collar pension obligation. That exceeds GM's current market value by about $20 billion.

"There's a lot of education that needs to go on to execute something like that," Steve Girsky told Reuters in an interview. "For the UAW to pull the trigger on that, it would seem to be something that big and visible would probably have to occur around bargaining."

A GM spokesman said there were no ongoing talks with the UAW over the pension obligation.

During the last round of labor talks in 2011, GM and the UAW agreed to discuss ways the No. 1 U.S. automaker could reduce the risk of its pension shortfall, viewed by credit ratings agencies as debt and a concern to GM investors.

The agreement, outlined in a letter, did not detail specific steps. Analysts said options likely include allowing UAW-represented retirees to voluntarily take lump-sum cash payments in exchange for giving up pension claims.

Another solution would be to spin off GM's blue-collar pension obligation to a third party. GM took that approach last year when it hived off its U.S. pension obligation to 118,000 white-collar retirees to a unit of Prudential Financial Inc PRU.N.

GM cut $28 billion, or about a quarter, of its U.S. pension liability through last year's move.   Continued...

 
A worker walks behind a logo of General Motors after the announcement of the closing of the Opel assembly plant in Antwerp January 21, 2010. REUTERS/Francois Lenoir