Judge denies some retirees ' bid to organize

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NEW YORK --- A bankruptcy judge on Thursday ruled that a group representing General Motors Corp.'s salaried retirees cannot form a formal committee to negotiate with the automaker as it attempts to reorganize and emerge from Chapter 11 as a new company.

U.S. Judge Robert Gerber said that because GM had the right to modify or terminate the retirees' health care and life insurance benefits before they filed for bankruptcy protection, the retirees can't challenge the automaker's ability to do so now.

"While I do understand the importance of this to the retirees, I can't grant the retirees rights that they don't have outside of bankruptcy," Judge Gerber said in issuing his ruling.

As part of its restructuring plan, GM plans to continue to pay health care and life insurance benefits for its 122,000 salaried retirees and their surviving spouses, but those benefits are expected to be reduced and the retirees will shoulder a larger share of their health care costs.

Retired hourly workers whose benefits are dictated by contracts with unions such as the United Auto Workers are not affected.

The General Motors Retirees Association said it was disappointed with Judge Gerber's decision and urged the federal government to help.

"While the GMRA leadership will consider all the legal options available to us, we now look squarely to the Obama administration and to the U.S. Congress to make certain there is a fair process and outcome for all GM retirees," said John Christie, the group's president. "GM retirees always expected to sacrifice as part of GM's restructuring, but one group of retirees shouldn't bear the bulk of that burden."

Earlier in Thursday's hearing, Judge Gerber gave GM final approval to access to its full $33.3 billion in bankruptcy financing. He had given preliminary approval earlier this month for GM to use $15 billion of the total.


DETROIT --- Michigan has won the high-stakes competition with two other states to build General Motors Corp.'s next-generation subcompact car, a person briefed on the decision said Thursday.

The announcement that the car will be built at a retooled midsize car factory in Orion Township near Pontiac will come today, said the person, who spoke on condition of anonymity because the plan has not been made public. It will save about 1,200 jobs at the factory, which had been slated to shut down later this year.

GM spokeswoman Sherrie Childers Arb declined to comment on whether GM had made a decision.

The Orion Township plant, about 40 miles north of Detroit, had been in competition with GM factories in Janesville, Wis., and Spring Hill, Tenn., to build the car.

-- Associated Press

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