News and Finance

DETROIT–The United Auto Workers union has ratified a package of concessions designed to reduce General Motors Corp.’s labour costs.

UAW President Ron Gettelfinger said at a news conference yesterday 74 per cent of GM’s 54,000 U.S. production and skilled-trade workers voted in favour of the deal.

The vote comes before an expected Chapter 11 bankruptcy protection filing by GM on Monday. Bankruptcy experts say having the labour agreement in place will help move the process through court more quickly.

But the deal did nothing for GM shares, which plummeted 37 cents (U.S.) in New York yesterday to close at 75 cents – the lowest level in 76 years.

The UAW says the cuts will save GM $1.2 billion to $1.3 billion a year.

"We very much appreciate the support of our employees and retirees," Diana Tremblay, GM vice-president for labour relations, said in a statement. "Their shared sacrifices will enable GM to become a stronger, more viable company that will continue to deliver world-class cars and trucks cheap payday loans."

UAW leaders agreed last week to the revised contract, which freezes wages, ends bonuses, eliminates non-competitive work rules and ends the possibility of a strike until the next contract expires in 2015.

It also gives a union-run retiree health-care trust 17.5 per cent ownership of a post-bankruptcy GM, with a warrant to buy another 2.5 per cent. The trust will take on the company’s retiree health-care costs starting next year. The stock will come in exchange for part of the company’s $20 billion obligation to the trust.

Bondholders have until 5 p.m. today to accept or reject the stock-for-debt offer, under which they would get a warrant for an additional 15 per cent of the new GM’s stock.

Existing GM shareholders would be left with little or nothing.

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