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GM exec hopeful UAW will make concessions

By Tom Krisher, Associated Press

Published January 13, 2009 at 12:05 a.m.

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General Motors Corp.'s chief operating officer wouldn't say Monday whether GM will need all $18 billion in government loans it sought from Congress, but he said GM's worst- case scenario would require more than the $13.4 billion already allocated by the Treasury Department.

Speaking to reporters at the North American International Auto Show in Detroit, Fritz Henderson said GM's emphasis is on making the Detroit automaker viable, showing that it can bring in more cash than it spends and repay what it has borrowed.

The worst-case scenario GM presented to Congress in December involved a U.S. market in which 10.5 million vehicles are sold a year. That matches what several analysts are predicting after poor consumer confidence and tight credit helped U.S. auto sales fall to 13.2 million vehicles last year from 16.1 million in 2007.

Auto consulting company CSM Worldwide said Monday it expects U.S. vehicle sales to hit a 27-year low of 11.5 million in 2009 but rebound to 13.6 million in 2010.

Henderson said he is confident GM will work out concessions from the United Auto Workers that are required under the government's loan terms. GM, Chrysler and the union have been talking about labor cost reductions and other changes to their contracts.

The companies have until Feb. 17 to hammer out amendments to their current labor contracts that would bring worker costs in line with those of employees at foreign auto companies' plants in the U.S.

BATTERY POWER

General Motors Corp. said Monday it has picked LG Chem Ltd. of South Korea to supply the lithium-ion battery cells for its Chevrolet Volt electric vehicle. Here's what that means:

* Made in Korea: The cells will be made in Korea, but they'll be assembled into battery modules and packs at a factory in Michigan. GM Chief Executive Rick Wagoner said the battery assembly facility will be the first in the U.S. operated by a major automaker.

* Largest lab: Volt vehicle line director Tony Poswatz said GM also will open a new battery lab at its Warren, Mich., technical center. The 31,000-square-foot battery lab will be the largest in the U.S., Wagoner said.

* In the future: LG Chem CEO Peter Kim said the company may eventually build cells in Michigan and anticipates that the company's U.S. subsidiary, Compact Power Inc., will add to its 100-person work force in Troy, Mich.

* Competitive advantage: Wagoner said the company is integrating battery research and assembly into its mainstream to develop powertrains of the future. "We believe this will become a competitive advantage for GM and will be critical to GM's success," he said in announcing the news at the North American International Auto Show.

Comments

  • January 13, 2009

    6:26 a.m.

    Suggest removal

    DakotaPlainsman writes:

    What union dominated industry has flourished in America? Where is the steel industry, ship building, textile? Education and government are big on unions, and few would hold them up as models of success. As long as the big three auto makers allow the unions to run the show, their decline will continue.

  • January 13, 2009

    6:28 a.m.

    Suggest removal

    DakotaPlainsman writes:

    GM Exec is using Obama's philosophy... hope. Good luck.
    In the business I was in, hope was NOT a course of action.