by Xinhua Writer Hu Guangyao

    CHICAGO, May 22 (Xinhua) -- With the June 1 restructuring deadline approaching, General Motors reached a tentative labor agreement with the United Auto Workers (UAW) in a bid to remove one of the major obstacles in its restructuring.

    However, the U.S. largest auto maker still has much ground to cover to avoid bankruptcy protection and dispel fears shared by investors, suppliers and dealers.

    According to a report by the Detroit News, GM autoworkers are to vote soon on the deal, as GM moves toward a government-imposed June 1 deadline to restructure or file for bankruptcy.

    While details of the agreement, reached on Thursday, were not disclosed, the deal is said to be similar to the new Chrysler LLC labor contract which included a reduction in break times, elimination of cost-of-living raises and 600-dollar Christmas bonuses and a provision that prohibits the UAW from striking through the fall of 2015.

    The tentative labor agreement between the UAW and GM will likely save the troubled automaker more than the 1 billion dollars that an earlier proposed deal was to.

    GM has also reached a labor agreement with Canadian Auto Workers unions that will allow the company to reduce some of its labor and retiree healthcare costs.

    Meanwhile, GM said Friday that it had received an extra 4 billion dollars in emergency government loans from the U.S. Treasury. The government has already injected a total of 19.4 billion dollars to keep the ailing automaker afloat since the beginning of the year.

    Last Friday, GM outlined a strategy to cut 1,100 dealers nationwide - a plan the automaker intends to complete in or outside of bankruptcy, said Mark LaNeve, GM's top North American sales and marketing executive.

    GM's decision to scale down about 40 percent of its U.S. dealership network will result in the laying off of 137,330 employees and eliminate an estimated 1.7 billion U.S. dollars in sales tax revenue for state and local governments, according to the National Automobile Dealers Association. In addition, GM will lose an estimated 35 billion dollars in sales revenue.

    Despite the deal with the UAW and the dealership cut plan, an agreement with bondholders remains one of the last major hurdles for GM to clear in order to avoid bankruptcy.

    A GM spokeswoman said Friday that the company will go ahead with its plan for a bankruptcy if no agreement is reached with its bondholders.

    The company is currently holding 27.2 billion dollars in debt with its bondholders. It wants to reach a deal before next Tuesday, when its bondholders must decide whether to exchange their bonds for 10 percent of GM's equity.

    Without a labor deal, experts say, these already reluctant bondholders would not consider exchanging what GM owes them for an ownership stake in the reconstituted automaker.

    GM has said it would give bondholders a 10 percent stake in the automaker, even though they currently own about 40 percent of the company's debt, and the U.S treasury would get about a 50 percent stake in GM.

    Bondholders have issued a counteroffer that would give them a 58 percent stake in the company. The U.S. Treasury, however, would not receive any stake in GM, and the automaker would remain liable to pay back that the government has lent it.

    Meanwhile, U.S. Lawmakers told GM officials and White House officials that bondholders must have a seat at the table during negotiations on how the company would be restructured.

    The company, the government, the union and the bondholders should negotiate details of a reasonable debt-to-equity swap before stepping into court, they said.

Special Report:  Global Financial Crisis

GM gets $4 bln additional aid from U.S. government

    CHICAGO, May 22 (Xinhua) -- U.S. automaker General Motors (GM) said Friday it borrowed another 4 billion U.S. dollars in federal aid from the Treasury Department as the company strives to present a restructuring plan to the government.

    The additional aid brings GM's total borrowing from the federal government to 19.4 billion dollars. Its original request to the U.S. Congress was 18 billion dollars in loans for its restructuring. Full story

U.S. auto unions make tentative deal with GM, Treasury on labor, medicare issues

  CHICAGO, May 21 (Xinhua) -- The United Auto Workers (UAW) union has reached a tentative deal with the U.S. Treasury Department and General Motors Corp. on modifying a labor agreement and restructuring payments into a union-run health care trust, reports reaching here said on Thursday.

    UAW local presidents and executives are expected to meet in Detroit on Tuesday with local ratification meetings scheduled for late next week, according to a Detroit News report. Full story

GM holds talks with UAW on comprehensive labor savings agreement

    CHICAGO, May 20 (Xinhua) -- The authorities of the biggest U.S. auto maker General Motors Corp is holding another round of talks with the United Auto Workers (UAW) at the U.S. Treasury Department Wednesday in an effort to reach a comprehensive labor savings agreement ahead of a June 1 government deadline.

    According to Detroit News report, the talks include representatives of the Obama auto task force, along with GM President and CEO Fritz Henderson and UAW President Ron Gettelfinger. Full story

GM cuts two-fifths of dealerships in Canada

    OTTAWA, May 20 (Xinhua) -- General Motors confirmed Wednesday that it has decided to cut two-fifths of its dealerships across Canada in its bid to restructure under financial difficulties.

    A GM spokesperson said letters were sent Wednesday to 245 of 709 dealerships in Canada informing them that their sales-and-service relationships will be ending. The move was being done in an effort to create a "more competitive dealer network," the spokesperson said. Full story

GM to close about 1,100 dealers in U.S.

The exterior view of the headquarters of General Motors (GM) is seen on this file photo taken on May 23, 2008 in Detroit, the United States. General Motors notified 1,100 of its 6,000. (Xinhua/Zeng Hu) Photo Gallery>>>

    CHICAGO, May 15 (Xinhua) -- About 1,100 General Motors Corp. dealers in the United States started receiving notices Friday that their franchises will be eliminated.

    According to a report by the Detroit News, the moves are part of GM's plan to cut its U.S. dealership ranks by about 40 percent from 5,969 to 3,600 by next year, a deeper and quicker cut than what was included in a February 17 plan rejected by President Obama's autos task force. Full story

GM posts net loss of $6 bln for first quarter

The exterior view of the headquarters of General Motors (GM) is seen on this file photo taken on May 23, 2008 in Detroit, the United States. (Xinhua/Zeng Hu) Photo Gallery>>>

    CHICAGO, May 7 (Xinhua) -- General Motors Corp. (GM) posted a net loss of 6 billion U.S. dollars in the first quarter of this year amid a global economic downturn and low sales that have helped push the automaker to the brink of bankruptcy, reports reaching here from Detroit said Thursday.

    According to a report by the Detroit News, GM spent 10.2 billion dollars more than it took in during the first quarter, a cash burn that was partially offset by 15.4 billion dollars in federal loans that has kept the company afloat since December. Full story

GM to shed 21,000 U.S. workers by 2010

    CHICAGO, April 27 (Xinhua) -- General Motors presented on Monday an updated viability plan that will lay off more U.S. workers.

    GM's hourly workers will be shed by 7,000 more than outlined in the February plan, from 61,000 to 40,000 by 2010. Salaried employees are also expected to be cut further. Full story

GM plans major revamp to get government aid

    BEIJING, April 28 -- General Motors Corp said Monday that it will cut 21,000 factory jobs in the United States by next year, phase out its Pontiac brand and ask the government to take company stock in exchange for half of GM's government debt as part of a major restructuring effort needed to get more government aid.

    The struggling auto maker also said it will offer 225 shares of common stock for every US$1,000 in notes held by bondholders as part of a debt-for-equity swap. The announcements came in a filing with the Securities and Exchange Commission. Full story

General Motors expected to dump Pontiac

    CHICAGO, April 25 (Xinhua) -- The U.S. largest automaker General Motors Corp. is expected to announce Monday its decision to kill the Pontiac brand as part of a tougher restructuring plan being overseen by the government, reports from Detroit said Saturday.

    GM has started reaching out to Pontiac dealers ahead of a public announcement about the brand's future, when the automaker likely will also outline permanent plant closures, more job cuts and a tougher offer to bondholders to slash the automaker's 28 billion U.S. dollars in unsecured debt. Full story

Fiat still pursuing deal with Chrysler

    BEIJING, April 28 -- Fiat Group SpA still wants to forge an alliance with Chrysler LLC if the United States auto maker is forced to file Chapter 11 bankruptcy protection from creditors, a source close to the Turin-based auto maker said Monday.

    Fiat is continuing talks to reach a deal by the Thursday deadline, the source said. Full story

Canada auto workers approve union agreement with Chrysler

    OTTAWA, April 26 (Xinhua) -- The workers of the Canadian branch of Chrysler have voted in favor of a deal between their union and the automaker, which would serve as a precondition for Chrysler to partner with Fiat to avoid bankruptcy.

    The deal was approved by 87 percent of those Chrysler Canada workers who voted, the Canadian Auto Workers Union (CAW) said in a release Sunday. Full story