The United Auto Workers union has reached a tentative deal with the government and General Motors Corp. that would cut labor costs and change the way a union-run trust for retiree health care is funded, according to AP. The union announced the deal in a short statement issued Thursday that gave no details, which were withheld pending meetings with members to explain the terms. The move is a key step toward GM's efforts to restructure outside of bankruptcy court. The company, which has received $15.4 billion in federal loans, faces a June 1 government-imposed deadline to restructure or be forced into bankruptcy protection. A big hurdle remains. GM needs bondholders who hold $27 billion in unsecured debt to forgive what they're owed for an equity stake in the company. Analysts have said it is nearly impossible that the required 90 percent of bondholders will agree to the offer. Union members still have to vote on their deal, according to the UAW's statement. It makes no mention of factory closures or production of vehicles outside the U.S., items that the union has protested in Detroit and Washington as the deadline approaches. GM plans to close 16 more factories, costing 21,000 hourly workers their jobs, as it tries to cut labor costs and shrink its manufacturing footprint to match lower demand for its products.
