Car firms need new agreement with unions

General Motors Corp and Chrysler LLC probably will need a new agreement with the United Auto Workers for union-run medical trusts before the money-losing automakers can complete a merger, people familiar with the matter said.

That adds a hurdle for GM and Cerberus Capital Management LP's Chrysler as they try to work out financing and other terms for a tie-up, said the people, who asked not to be identified because the discussions are private.

Talks on the so-called Voluntary Employee Beneficiary Associations, negotiated in the UAW's 2007 labor contracts, would give the union an avenue to resist or influence a merger, the people said. GM and Chrysler won court approval this year to form the VEBAs, which will manage retirees' healthcare bills.