DETROIT, Jan. 9 (UPI) -- Terms of a U.S. loan to automakers provide that companies could be found in default if the United Auto Workers strike, documents filed this week indicate.
Conditions of the Treasury Department loans to General Motors Corp. and Chrysler LLC were revealed when GM filed documents with the Securities and Exchange Commission, the Detroit Free Press reported Friday. GM borrowed $13.4 billion and Chrysler borrowed $4 billion.
Auto industry analysts told the newspaper the prospect of the automakers being in default if autoworkers go on strike illustrates the complicated nature of the situation facing U.S. automakers and the unions.
The UAW is under a Feb. 17 deadline to agree to concessions to bring their compensation in line with that of employees of foreign automakers. The UAW has not threatened to strike but the possibility of a walkout has traditionally been a key element of contract negotiations.
Harley Shaiken, a labor expert at the University of California at Berkeley, told the Free Press the language in the Treasury loan effectively "makes a strike the nuclear option."
GM spokesman Tony Sapienza told the newspaper the union is not prohibited from striking, but if the UAW were to strike, "we would be immediately in default, which -- I think we all agree -- is not in anyone's best interest."
Wayne State University Law School Professor Peter Henning told the newspaper a strike would not automatically mean the automakers are in default, only that they could be found in default.
GM Chief Executive Officer Rick Wagoner and UAW President Ron Gettelfinger said on NBC's "Today" show they didn't expect the provision to be a problem.
"We've worked some tough stuff together over the last three or four years," Wagoner said, "and I'm confident that we'll come together and get the kind of changes that we need."
