With General Motors Corp facing the prospect of its first strike in almost a decade, the $50 billion question for the struggling automaker is how badly it wants to buy peace with its major union.
After a weekend of marathon contract talks and progress on the central issue of how to cut GM's staggering health-care costs, the United Auto Workers union threatened to strike on Monday if no deal is reached by 11 a.m. EDT (1500 GMT).
That leaves GM facing a tough choice and a ticking clock: How many U.S. factory jobs can it promise to keep in order to clinch the kind of historic concessions on health care that Wall Street analysts have come to view as essential?
The UAW has signaled that it is willing to accept a GM plan that would shift responsibility for more than $50 billion in retiree health-care obligations to a new trust fund.
But in 10 days of intensive talks since the expiration of the previous contract for 73,000 GM workers, the union also has held firm to a demand that GM offer up some kind of job security guarantee in exchange, people close to the talks say.
In setting a Monday strike deadline, the UAW drew a line in the sand on further U.S. job losses.
We're shocked and disappointed that General Motors has failed to recognize and appreciate what our membership has contributed during the past four years, UAW President Ron Gettelfinger said in a statement.
UAW members, Gettelfinger said, had made extraordinary efforts to help GM cut costs, including a buyout program that cut more than 34,000 factory jobs from the automaker's payroll.
This is our reward, the UAW's chief GM negotiator Cal Rapson said. A complete failure by GM to address the reasonable needs and concerns of our members.
Rapson, according to people close to the talks, has stressed at the bargaining that GM's UAW-represented workers would only ratify a new contract that assured them of the automaker's commitment to keeping U.S. factories running.
Dissidents, who have urged the union's leaders to reject GM's health care proposals, agree that the UAW should hold the line on job security now.
GM is responsible for getting into this position, said Paul Schrade, a former UAW regional director. It's not Mexico. It's really about China, that's GM's target now. That's where they want to expand.
STAKES JUST GOT HIGHER
But analysts caution that a still-weak GM is in no position to promise job security for its American workers.
Several GM assembly plants -- including its Spring Hill, Tennessee, and Lordstown, Ohio, facilities -- have no clear role in GM's upcoming product plans.
GM's sales also have dropped 7 percent so far this year and some skeptics have questioned whether its restructuring efforts are in danger of stalling.
Against that backdrop, a health-care deal has been seen as GM's best bet. By establishing a trust known as a voluntary employee beneficiary association, or VEBA, GM could look to cut its own costs by some $3 billion annually, analysts say.
Expectations for that kind of cost-cutting labor deal have sent GM shares up by almost 14 percent this month.
In an interview with Barron's published Sunday, Credit Suisse analyst Chris Ceraso said a reasonably good labor deal for GM could extend that rally, sending its stock to $40 from just under $35 as of Friday's close.
But analysts also have worried GM could limit its ability to respond to a deeper decline in U.S. sales by promising away job security in order to get a breakthrough on health care.
You've got to worry that they don't give up too much, said Shelly Lombard, senior high-yield analyst at Gimme Credit, an independent research firm on corporate bonds.
GM and UAW will continue to negotiate Monday until the strike deadline, both sides said. A tentative contract would have to be approved by GM's 73,000 active workers.
Any deal would also set benefit terms for almost 339,000 GM retirees and their surviving spouses and set a benchmark for still pending negotiations between the union and Ford Motor Co and Chrysler LLC.