DETROIT - The reformation of General Motors Corp. moved into high gear yesterday as union workers approved wage concessions, the company's stock price fell to its lowest in 76 years, and the automaker announced it planned to start building the smallest vehicles it has ever produced.
All that came as GM, once a bellwether for American industrial might, prepared to file for bankruptcy protection within days.
Shares of GM common stock, which will be virtually wiped out in bankruptcy, fell 37 cents yesterday to close at 75 cents. At their high on April 28, 2000, GM shares traded at nearly $94.
The company said yesterday it plans to reopen a shuttered U.S. factory to build subcompact cars, an element of GM's shift from hulking SUVs to more gas-sipping microcars. The move comes as GM prepares to announce the fate of the poster child for gas guzzlers, the Hummer brand.
Meanwhile, the United Auto Workers said its members had ratified a package of pay and work-rule changes designed to reduce the automaker's labor costs.
Also yesterday, the German government and GM agreed on the framework of a deal for Magna International Inc. to take a majority stake in GM's Opel unit.
GM's bankruptcy filing is expected Monday, when the company also plans to announce it will close 14 more factories, including four assembly plants.
A person briefed on GM's plans said the small cars would be built at one of those plants. The person, who requested anonymity because of the sensitive nature of the plans, said GM had not determined which plant would get the new cars.
The retooled factory will be able to build 160,000 cars per year, GM said. It would create 1,200 jobs, the person said, offsetting some of the 21,000 that will be lost when GM closes the 14 factories by the end of next year.
The move to build the subcompact in the United States follows a firestorm caused by GM's plans to produce up to 51,000 subcompacts per year in China and ship them to this country starting in 2011, disclosed in documents submitted to Congress.
GM already builds the compact Chevrolet Cobalt and Pontiac G5 at a plant in Lordstown, Ohio, and it plans to retool that plant to start making a new small car, the Chevrolet Cruze, next year.
UAW president Ron Gettelfinger said at a news conference that 74 percent of GM's 54,000 U.S. production and skilled-trade workers voted in favor of the concession deal.
Union leaders agreed to the revised contract last week. It freezes wages, ends bonuses, eliminates noncompetitive work rules, and ends the possibility of a strike until the next contract expires in 2015.
It also gives a union-run retiree health-care trust 17.5 percent ownership of a post-bankruptcy GM, with a warrant to buy an additional 2.5 percent.
Reaching a deal with the union was one of the conditions imposed on GM by the Obama administration's auto task force. Originally meant to help keep the automaker out of bankruptcy court, the labor agreement will help move the process through court more quickly, bankruptcy experts say.
The UAW says the cuts will save GM $1.2 billion to $1.3 billion a year.
GM has received $19.4 billion in loans from the U.S. government, which would get 72.5 percent ownership of the new company, perhaps sharing with the Canadian government. The remaining 10 percent would go to GM bondholders to wipe out $27 billion in unsecured debt.
Bondholders have until 5 p.m. EDT today to accept or reject the stock-for-debt offer, under which they would get a warrant for an additional 15 percent of the new GM's stock.