Daily Edition: Dec. 12, 2005

December 12, 2005

Ford Plans Turnaround, Deals with UAW

Top Ford executives remain tight-lipped about the impending "Way Forward" turnaround plan that the automaker is expected to unveil next month, rife with plant closings and personnel cuts.

UAW president Ron Gettelfinger said he doesn't expect to learn more details about the plan until right before Ford is actually ready to announce the plans. Ford, however, is under pressure to move up the date of the announcement so it won't interfere with the company's efforts to roll out new products during the North American International Auto Show.

Meanwhile, the UAW and Ford have reached an agreement on healthcare benefits that is expected to help Ford save close to $1 billion yearly. Having the healthcare cuts from the union should help enhance credibility of the turnaround plan.

Speculation in the press has had Ford eliminating as many as ten different manufacturing and assembly plants and 30,000 jobs. Ford, however, has not confirmed any of the numbers or offered any kind of additional details, although the plan is expected to involve eliminating assembly plants in Atlanta, St. Louis and St. Paul, Minn., as well as Wixom, Mich., outside of Detroit.

Ford Plans Turnaround, Deals with UAW (12/11/2005)
Healthcare cuts agreed upon as turnaround plan takes shape.

Delphi Edges Away From Hard Line

Facing pressure from General Motors Corp. and a fierce counterattack from the United Auto Workers, Robert "Steve" Miller is backing away from some hard-line positions taken in the war over the future of Delphi Corp.

Miller told the Wall Street Journal that he was preparing a new contract offer for the union and considering changes to an executive compensation plan to which the union objected.

Ron Gettelfinger, UAW president, has dismissed the idea that Delphi's executives needed any kind of special compensation and Richard Shoemaker told reporters that the company would be better off if the senior management team resigned.

Gettelfinger said during a two-hour meeting with reporters over breakfast last week that contacts with Delphi's top management are sparse. Delphi officials admitted there were no formal negotiations with the union underway.

"They will step back and say these are the bad guys," he said. "But this thing is headed for confrontation - make no mistake about that," Gettelfinger said "We've not been bashful about letting people know that. There's no relationship and no trust," Gettelfinger said.

Delphi Edges Away From Hard Line (12/11/2005)
But no deal in sight for GM supplier.

Kerkorian Presses GM for Board Seat

General Motors and Kirk Kerkorian's Tracinda Corp. remain at odds over a seat on GM's board of directors for one of the Las Vegas mogul's top lieutenants.

The two sides couldn't quite get a deal done last week. But it still appears likely that Jerry York, the former Chrysler Corp. executive who has watched over Kerkorian's automotive interests for more than a decade, will wind up on the GM board next year.

If York, who has become a quietly controversial figure around Detroit during the past two decades, doesn't get the seat, someone who reports to him probably will.

However, York is already in regular contact with top GM executives on the board. A seat becomes the next logical step in what has been a fairly orderly entry into GM's affairs over the past eight or nine months by the 88-year-old Kerkorian.

Initially, Kerkorian didn't push for the seat on the board when he started buying up the automaker's stock last spring. But times have changed and the recent drop in GM stock, which cost Tracinda a fortune, has prompted Kerkorian and his advisers to re-think their position and take a slightly tougher line with GM's management.

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