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GM, Ford Shares Up After UAW Pact

Shares of GM rose 4.2 percent while Ford rose 5.7 percent in premarket activity, following a visit from Obama's auto task force and passage of a modified union deal.

DETROIT (AP) -- Shares of Detroit's automakers rose in premarket activity Tuesday, following a visit from the Obama administration's auto task force and passage of a modified union deal.

Members of the auto task force, who are determining whether to give General Motor Corp. and Chrysler LLC billions more in loans spent Monday test driving GM's Chevrolet Volt, an electric car that can go up to 40 miles on a single charge.

The task force also visited a Dodge truck plant run by privately held Chrysler. The companies have received at total of $17.4 billion in low-interest government loans to stay afloat and are asking for $21.6 billion more to weather the worst auto sales downturn in 27 years.

Shares of GM rose 7 cents or 4.2 percent to $1.75 in premarket activity.

Separately, the members of the United Auto Workers union at Ford Motor Co. approved modifications to a 2007 contract that eliminates certain benefits, freezes wages and allows payments to a retiree health care trust to be made in stock.

Shares of Dearborn-based Ford Motor Co. rose 10 cents, or 5.7 percent to $1.84.

Ford is not seeking government loans, but reached a deal with the UAW before its rivals so it wouldn't be "disadvantaged" in terms of labor costs.

GM and Chrysler have reached a deal with the UAW on wages and benefits, but have yet to settle on terms that would modify its health care trusts, called voluntary employee beneficiary associations, or VEBAs. In Ford's case, up to 50 percent of future payments to the VEBA can be made in stock, in an effort to help the automaker preserve cash.

The UAW has not released details of labor concessions made with GM and Chrysler. According to terms of the loan, the two companies must bring their labor costs in line with those of foreign automakers operating plants in the U.S.

GM and Chrysler have until March 31 to make progress on the requirements of the loan.

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