The source said GM must shrink, and that means more plants shutdowns. The carmaker may list the number of plants it must close without identifying specific factories, the source said.
That would help the UAW to win rank-and-file ratification for any major changes without alienating workers at the plants scheduled for closure.
Work rule changes also are a critical bargaining item, the source said. Even before the 2007 UAW contract talks, GM had launched a program called True North to achieve the industrys most-efficient labor rules for assembling vehicles and producing parts.
The 2007 contract mandated lower wages for newly hired workers, and outsourced non-production jobs such as forklift drivers.
The current crisis is an opportunity for the True North program to make further progress and meet federal loan conditions, which require GM and Chrysler to bring work rules in line with those of the Japanese transplant automakers in the United States, the source said.
Without requiring additional wage cuts, the UAW could help save GM more than $1 billion annually through factory rule changes, the source said.
For example, the UAW could agree to reduced skilled trades job classifications from as many as 15 in some plants to just two: electrical and mechanical.
Worker break times could be reduced. A provision called full utilization could be eliminated, the source said. That rule requires UAW skilled trades members to be present in equal numbers to outside contractors making repairs or doing construction in a plant, the source said.
Most savings eyed
Other cost savings are available. The UAW could agree to reduce absenteeism pools of workers, who are hired to fill in for employees who dont show up for work.
These things can take a lot of costs out without ever hitting worker wages, the source said.
GM and UAW spokesmen declined to comment on the talks.
Auto analyst David Cole said he expects sweeping changes in GMs viability plan. Plant shutdowns, dealer reductions and labor concessions are needed to keep GM out of Chapter 11 bankruptcy, Cole said.
Thats the last thing the union wants, said Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.
He said he would not be surprised to see GM clarify the fate of its distressed brands: Saturn, Hummer and Saab.
Retiring GM Vice Chairman Bob Lutz, in an interview with Automotive News published today, said Saturn probably would not survive long-term.
This plan is going to get our attention, Cole said. It will not be minimalist by any means.
Its unclear if there will be enough time for the UAW to approve concessions to its GM and Chrysler retiree health care trusts.
The U.S. Treasury wants the UAW to take equity instead of cash for half of the $20 billion that GM still owes its Voluntary Employee Beneficiary Association. That will be an issue to be negotiated past the deadline, the source said.
Meanwhile, a parallel set of talks have been under way at GM's smaller rival Chrysler with the union and its creditors.
Chrysler, controlled by private equity firm Cerberus Capital Management LP, has been granted $4 billion and is seeking an additional $3 billion in aid.
Both GM and Chrysler have buyout and early retirement offers to almost all of their nearly 91,000 hourly workers as they work to cut costs and bring in lower-cost workers.
Ford Motor Co., which so far has not requested federal assistance, would likely ask for similar concessions granted to GM and Chrysler.
Reuters and Jamie LaReau contributed to this story