GM share prices improve after improved hopes for talks with UAW

GM share prices improve after improved hopes for talks with UAW

General Motors under pressure from Japanese companies recently announced plans for more job cuts and closing down of factories. However, the latest information in is good news for the company. The share prices of the American auto giant improved by around 8.5% after reports emerged that the United Auto Workers has agreed for a discussion.

Now, the Vice President of the Union, Dick Shoemaker has the power to negotiate with the company on topics like cost cuttings within the framework of the contract that expires in 2007. Dana Johnson, senior economist at Detroit-based Comerica Bank said in a statement: “Anything that creates a sense that a constructive dialogue is possible has to make you feel better about the prospects for GM in the future. There was a sense that the union was going to stonewall GM, but now there seems to be room for flexibility.”

The contract between the two parties expires in September 2007. The company wants to cut down expenses on health benefits to lower their expenditure on the labor. GM suffered a massive loss of USD 1.1 billion in the first quarter of this year, which is the worst possible result in around 13 years for a 3-month period.

General Motors on their part have refused to make any comment on their latest discussions with the Union Workers.