UAW to suspend jobs bank, rework healthcare trust

By Poornima Gupta and Soyoung Kim

DETROIT (Reuters) - United Auto Workers President Ron Gettelfinger said on Wednesday the union would surrender job security protections and delay payments to a retiree healthcare trust in concessions intended to help U.S. automakers clinch government aid to survive a sales downturn.

Gettelfinger also said the UAW would consider other changes to contracts reached in 2007 with General Motors Corp GM.N, Chrysler [CBS.UL] and Ford Motor Co (F.N: Quote, Profile, Research).

Details on the suspension of the jobs bank and delay of payments to the healthcare trust still need to be worked out, as does the time frame, but quick action is expected. Some changes may require approval of UAW members, others may not.

All three Detroit-based automakers said Tuesday that they needed new concessions from the union in restructuring plans submitted to Congress seeking a combined $34 billion of aid.

GM asked Congress for $18 billion of aid, including $4 billion by the end of December to avoid collapse, while Chrysler sought $7 billion by the end of the month as well.

Ford, widely seen as the strongest of the three, said it was seeking a $9 billion line of credit as insurance in part against the collapse of one of its rivals.

The union and automakers reached agreement last year on contracts that created a Voluntary Employee Beneficiary Association, or VEBA, to take over an estimated $80 billion of retiree healthcare liabilities starting in 2010.

Easing the pressure on automakers from high retiree healthcare costs was seen at the time as the single biggest concession the union could offer the companies.