GM says UAW contract changes could save $1.1 billion

DETROIT (Reuters) - Changes to General Motors Corp's GM.N contract with the United Auto Workers union could save the automaker $1.1 billion or more in hourly labor costs, GM said in a report to the U.S. Treasury released on Wednesday.

This is the first time GM has attached a dollar value to the proposed changes. Neither the company nor the UAW has disclosed what those changes entail and the revised contract has not been put up for a ratification vote by union members.

The UAW's current four-year contract with GM and other Detroit-based automakers runs until 2011.

GM's disclosure of projected cost sayings was the first time it had commented on the pending contract changes. It was contained in an update on its previous turnaround plan filed with the Treasury on Monday.

The report was filed with U.S. officials on the same day that President Barack Obama rejected GM's existing restructuring plan as too limited and gave the automaker a 60-day deadline to negotiate new concessions from the UAW and bondholders under the threat of bankruptcy.

The automaker said that the UAW contract changes would take its total hourly employment costs on an annual basis to $6.5 billion in 2009 from $7.6 billion in 2008.

GM said the savings could be larger if it were able to bring in more lower-cost new hires or temporary workers.

GM has been operating since the start of the year with $13.4 billion in emergency loans approved in late December by the Bush administration.

Terms of those loans had set a target for GM to cut its hourly compensation in order to make it competitive with the U.S. factory costs of Japanese automakers led by Toyota Motor Corp (7203.T).