UAW Unhappy About Possible GM, Chrysler Merger

Union President Ron Gettelfinger said he is very concerned that more workers could lose their jobs if General Motors' talks to acquire Chrysler come to fruition.

LIVONIA, Mich. (AP) -- As negotiations for General Motors Corp. to acquire Chrysler LLC appear to be gaining momentum, United Auto Workers President Ron Gettelfinger said Friday he is very concerned that the deal may happen, with many workers losing their jobs.

Gettelfinger said in an interview that he knows the companies have been holding discussions for a long time and said there probably are steps the union could take to try to halt any merger. But he said that would be speculation at this point.

"Let's say we're concerned that it's coming because of the impact that it would have on our work force," Gettelfinger said at a union hall rally for Democratic presidential candidate Barack Obama.

Neither Chrysler nor GM has contacted the union about the acquisition talks, he said, but he cited reports about the merger that say GM would look to take costs out if it were to acquire Chrysler.

"That's going to mean a reduction of workers," he said. "I don't know just exactly how that would work out, but yes, we are very concerned about that."

Chrysler has 66,409 employees, most of them in North America. About 33,000 are represented by the United Auto Workers.

Gettelfinger said the union also is concerned about further job cuts at GM as it tries to deal with slumping sales and the credit crisis. The automaker has announced more than 4,300 layoffs at its factories since Monday, and industry analysts have said more may be on the way.

Chrysler CEO Bob Nardelli, in a television interview Thursday night, would not comment on talks with GM, but said the automaker is looking for partners and alliances. He said economic troubles have made the industry ripe for consolidation.

"It certainly creates an environment for consolidation where you can get synergies of productivity that will allow you to be more competitive, not only here in the U.S. market, but on a global basis," he said.

GM has discussed a merger or acquisition with Cerberus Capital Management LP, the New York private equity firm that owns 80.1 percent of Chrysler, a person familiar with the negotiations told The Associated Press last week.

Chrysler, Gettelfinger said, could still make it on its own because it has rechargeable electric cars and other new models in the works.

"I think Chrysler's got some surprises when it comes to products that people are not aware of," he said. "But Chrysler is obviously impacted. They've been hit very hard on sales as the entire industry has. To say that they can survive or not, I think Chrysler is in good shape, at least for the next couple of years."

The Wall Street Journal reported on its Web site Thursday night that potential lenders are eager to see the deal finished, and that GM wants it done as early as the end of October.

GM is trying to raise additional capital as it faces potentially huge losses when it reports third-quarter earnings in the coming weeks.

A major player in the deal is J.P. Morgan Chase & Co., one of the largest holders of Chrysler bank debt and one of GM's key lenders, the Journal said.

Another person with knowledge of the talks told The Associated Press on Thursday that no deal is imminent. Also, GM's board reportedly has been cool to the idea.

Industry analysts also are skeptical of how GM will benefit because the companies have so many overlapping brands and models, but Chrysler has said it has about $11 billion in cash, and GM may be interested in gaining access to that.

Analysts say cash would be the only reason for GM to be interested in taking over Auburn Hills, Mich.-based Chrysler, a privately held company that does not have to report earnings. It lost at least $510 million in the first quarter and $1.6 billion last year. Its sales are down 25 percent so far this year, the worst drop of any major automaker.

Detroit-based GM is burning through more than $1 billion in cash per month, with several analysts predicting it will reach its minimum operating cash level of $14 billion sometime next year. Sales are down 18 percent, and the company has lost $57.5 billion in the past 18 months, largely because of tax accounting changes.

All of this comes as U.S. car sales have slowed to their lowest point in 15 years, making bankruptcy possible for all of the cash-strapped Detroit Three if things do not turn around soon enough.

GM on Thursday made public that it will lay off 1,600 workers at three factories in Michigan and Delaware in the coming months as it tries to keep inventory in line with slumping sales. On Monday the company sped up the closure of a Wisconsin sport utility vehicle plant and announced it would close a metal stamping factory near Grand Rapids. Those moves will cost more than 2,700 jobs.

"We're concerned about additional cuts," Gettelfinger said. "Clearly vehicle sales have really come down from where everyone anticipated."

GM shares rose 3 cents to close at $6.43.

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