GM insiders say the company will present two choices in its submitted report today: more bailout funds from the government, or government backing for a bankruptcy filing.

Last-minute concessions negotiations between the UAW and both GM and Chrysler were said to continue all through last night.

President Obama backed away from a prior promise to appoint a car czar to oversee GM and Chrysler, instead deciding to name a Presidential Auto Task Force under the leadership of Treasury Secretary Timothy Geithner and Ron Bloom, a former adviser to the United Steelworkers that told the steel workers’ union to accept major concessions as part of bankruptcy filings. Will Bloom do the same with the UAW and GM? Those who’ve previously worked with Bloom think so.

“The management of the Big Three are probably not going to like what Ron Bloom has to say; the UAW is not going to like what Ron Bloom has to say; and certainly the stockholders and creditors will not like what he has to say,” said Michael Psaros, a co-founder of private-equity group KPS Capital Partners, who has worked with Mr. Bloom in and out of bankruptcy courts. He adds that Mr. Bloom has “repeatedly shown an ability to transform struggling companies into profitable going concerns.”

GM and Chrysler’s plans for viability are to be submitted to the Treasury Department by 5pm today, Tuesday and are required to include concessions from the UAW on labor and healthcare costs. In addition, GM’s bondholders are required to make similar concessions on debt and according to insiders in on the negotiations, the bondholders presented a plan to the GM board on Monday.

What else will the reports include? What else can GM cut?

GM could announce plans to axe one or more brands, including Hummer, Saab, Saturn, or even its old mainstay, Pontiac. GM has previously said that all these brands are on the table. It has also said in previous filings with the government before a bailout was granted that it could decrease American plants from 47 to 38 within four years. The Wall Street Journal reported Saturday that GM will outline a bankruptcy contingency plan in its report, although it has previously said that bankruptcy is untenable. An insider reports that GM will argue that the government would spend more on the company in a bankruptcy situation than it would to keep GM from bankruptcy.

Chrysler could announce a renegotiation of its secured debt (it’s not saddled with the massive amounts of unsecured debt that GM is), plant closings, or international partnerships with Nissan or Fiat, which recently took large shares of the company in exchange for partnership plans for small cars.

Auto industry analysts said Monday, the day before a government deadline for GM to turn in a plan for viability, that UAW needs to broker concessions on par with those already given to GM by its bondholders. The bondholders mostly consist of pension and retirement accounts held in mutual funds, and therefore UAW needs to “share the pain” and agree to allow GM to swap cash payments into its healthcare trust for GM stock, according to analysts.

The government has mandated that GM restructure two-thirds of its $28 billion in unsecured debt before further bailout funds are given. Insiders familiar with the ongoing negotiations said that talks with the UAW and bondholders made progress on Monday; a detailed agreement is not expected (and not required) to be reached by the Tuesday preliminary report deadline. The smaller Chrysler was also locked into last-minute negotiations with the UAW, talks that were proceeding, like GM’s, after the UAW stormed out of talks over the weekend.

Glenn Reynolds, CEO of a research firm in New York City, said of the debts: “The bondholders have to be very guarded about being used as the swing factor in the restructuring. It has to be equal with the UAW’s contributions.”

Reuters reports:

“Reynolds described the bondholders as mostly pension funds, mutual funds, insurance policy holders, retirement savings plans and other investors, many of whom helped to fund GM’s pensions. Wall Street or vulture investors make up a distinct minority, he said.

“The sense by some that there has been an absence of fair play for bondholders clearly has been a problem to date,” he said. “In the end, it may play to the pro-Chapter 11 crowd.”

JPMorganChase, which is one of the debtors to both GM and Chrysler itself, released a report last week predicting that debtholders would receive 50 cents per dollar of debt with government subsidies; this is a relatively high rate of return for bond markets right now. JP Morgan also predicted that funds holding the bonds would be less likely to concede if they weren’t treated equally with the UAW. Their report recommended that the government provide 10 cents on the dollar and issue new notes for 40 cents on the dollar, and they concluded that GM could again become profitable by 2010 if these measures were taken.

Reynolds, who previously served as head of global corporate bond research at Deutsche Bank and was a managing director of fixed-income research at Lehman Brothers, said the union had not been unfairly singled out in the process.

Shareholders have been wiped out essentially, the majority of bondholders will be permanently and materially impaired and salaried workers and retirees have been “slaughtered,” he said. Suppliers also have taken massive losses, he added.

“For bondholders, they will not get a fresh bite at the apple in a few years — unlike the UAW via collective bargaining,” Reynolds said. “The bondholders will crystallize their losses.”

UPDATE: The New York Times reports that GM and UAW are stalled on the issue of healthcare for retirees as GM prepares to submit a 100-page report that details the largest restructuring plan in General Motors history. UAW expects GM to cover costs for $5 billion in healthcare a year, despite GM losing $20 billion last year.

Meanwhile, Chrysler executives were meeting with 80% owners Cerberus Capital Management on Monday to supervise the contents of Chrysler’s own restructuring plan.

After UAW officials walked out of concessions talks Friday night, UAW and GM resumed their talks today, as required by GM’s federal bailout.

The dispute between UAW and GM negotiators centers around GM’s cash payments to a union fund for retirees’ health care. GM wants to swap its infusion of funds and instead provide GM stock to the retiree fund. An unidentified source told the Associated Press that what GM was offering was detrimental to retirees’ health care. GM owes more than $20 billion to the fund and wants to contribute half that value in GM stock. The trust fund begins providing payments for health care to GM retirees on January 1, 2010.

The talks are a last-minute component of a February 17 deadline– two days away– for GM to submit a plan for viability to the federal government as part of the bailout terms. Chrysler LLC is also facing the same time crunch and seeking similar concessions from UAW. If the plan pleases government officials, GM is on the line to receive an additional $4 billion to the $9 billion in loans it’s already received.

The trust came into place in contract talks with UAW in 2007; creating the trust allowed GM to strike more than $45 billion in retiree health care from its books, a bid to make the Detroit company more competitive against Asian car companies. UAW says that a fully-funded trust could provide retiree health care for 80 years. However, the breakdown in auto sales in 2008 left GM unable to fulfill its commitment to fully finance the fund. By swapping stock instead of cash, UAW would become a significant shareholder of GM stock and could even insist on a seat on the board of directors.

GM’s board will convene via conference call on Monday to resume negotiations.

If negotiations fail, experts say that the Obama administration would face a dilemma in the face of no framework on which to confirm GM’s bailout requirements a success.

GM’s European labor unions are recommending that its European brands, Vauxhall and Opel, be spun off into separate companies rather than undergo the strict cost cutting GM headquarters says is necessary to become viable again under what GM insiders call the “Renaissance” project.

“The implementation of the ‘Renaissance’ project in Europe will ultimately lead to a collapse of Opel/Vauxhall. This means scorched earth will be left in Europe with major conflicts all the way to the end.” — statement from GM’s European Employee Forum

While GM and Chrysler have already negotiated with the UAW to bring an end to the jobs bank program (as required by GM and Chrysler’s federal bailout announced in December), Ford is still negotiating with UAW about an end to the program. Ford didn’t take a bailout, but still wants to end the program to gain a better financial footing. The jobs bank program continues paying 95% of wages and benefits to auto workers whose plants have closed, and costs Ford millions each year.

In order to begin negotiations with Ford on the matter, the UAW required the Detroit company to enter negotiations with its bondholders for concessions. GM and Chrysler are required to undergo similar bondholder concession talks by terms of the federal bailout. With no bondholder talks yet, Ford can’t announce a set date for an end to the jobs bank; UAW allowed Ford to announce an agreement had been reached to settle concerns about the company. The UAW wants the bondholders to split a “shared sacrifice.”

The UAW has also asked for its own representation on the Ford board of directors, in exchange for the union agreeing to allow retiree pensions to be bonded through company stock rather than outright cash.

According to The Detroit News, Ford actually has little chance of succeeding at renegotiating debt with its bondholders, because it has little to offer those bondholders in return.

GM and Chrysler are required by the federal bailout to renegotiate terms on two-thirds of their debt obligations, a process they’re undergoing right now; if they are unable to settle on terms with their lenders, the companies would be unable to qualify for further bailout funds and will sink into bankruptcy. Ford cannnot threaten bondholders with the prospect of bankruptcy, since it is on more solid financial footing than either GM or Chrysler.

Insiders point out that Ford needs only to win small concessions to take to UAW President Ron Gettelfinger to in turn show its union workers that they’re not the only ones conceding terms.

Shelly Lombard, a Gimme Credit analyst, responds that bondholders have little reason to concede terms to Ford at this time; they could wait and see if the bonds decline in value, at which point in time Ford might ask for its own bailout from Washington, which would probably mandate (as with GM and Chrysler now) that Ford restructure the debt. Although bondholders might object to taxpayers receiving equity in the company and having to follow federal mandates in order to receive the bailout cash, Lombard says: “If I was a bondholder, I’d wait it out. There’s almost an incentive not do anything now.”

A Ford insider concludes: “Everything is trickier for us because we’re not doing this under the auspices of the federal government. But we still wouldn’t rather be GM.”

Ken Lewenza, head of Canadian Auto Workers (CAW), urged the UAW not to accept any cuts in wages or benefits during United Auto Workers’ upcoming negotiations with the Big Three auto companies in light of the financial problems facing the industry and the $17.4 billion bailout offered to the auto companies by the Bush administration.

Lewenza said that he hoped incoming American President Barack Obama would rescind requirements that the auto companies cut wages and benefits when Obama takes office on January 20th.

Lewenza stated:

“I’m hoping on Jan. 20 president-elect Obama will recognize that the challenges in the auto industry aren’t the result of collective bargaining issues. It’s a global financial crisis, it’s market conditions. The wage rates that the UAW have are competitive.”

Mark Meldrum of the University of Windsor in Canada pointed out that UAW workers’ jobs require few skills and those workers will probably see pay cuts of $10 an hour: “They will be paid what they’re worth.”

The CAW split off from the UAW in 1985.

The UAW has agreed to make concessions on a health care trust and in a rule requiring the Big Three to continue to pay 95 percent of an employee’s salary even if their plant has closed down entirely.

The contract stipulation has cost GM, Ford and Chrysler millions of dollars and has been blamed for contributing to Detroit’s current economic woes.

The pay arrangement was confirmed by Chrysler chief Robert Nardelli in hearings before Congress last week, when Nardelli confirmed that Chrysler was still responsible for 95% of an employee’s salary, whether the employee’s plant was open or not. Under the plan, called the Jobs Bank, employees receive 95% of their salaries for the rest of their lives if their plant closes. The program was established more than 20 years ago.

None of the companies have revealed just how much they’ve spent on Jobs Bank, but in four-year labor contracts signed in 2003, GM set aside $2.1 billion for the program, Ford $944 million and Chrysler $501 million.