GM-UAW Contract Boosts Jobs, BonusesBy Michelle Krebs September 20, 2011
The United Auto Workers (UAW) unions tentative contract with General Motors includes new jobs, a signing bonus for members, enhanced profit sharing and a boost in pay for entry-level workers, union officials said Tuesday. The contract now goes to GMs 48,500 UAW members for a vote. At the same time, contract talks at Chrysler and Ford are gearing up. UAW President Bob King (below, left) said the contract could add as much as $20,000 in compensation to union members wallets over the course of the four-year deal, depending on GMs level of profits. This despite the fact that the contract includes no annual raises for most workers in the next four years. Workers will receive a minimum of $3,500 in profit-sharing next year and a $250 per-year bonus for meeting quality targets. GM workers will vote on the contract over the next week, while the UAW accelerates talks with Chrysler and Ford.
Other highlights of the tentative GM contract include: the addition of 6,400 jobs; a $5,000 signing bonus for all members; and a $3.50 per hour boost for entry-level workers under the two-tier wage structure to $19.28 an hour from the current $14 to $16 an hour, about half of what workers with more seniority receive. The contract maintains the unlimited $25 per visit co-pay for health care. But jobs were the top priority in this round of negotiations, the first since GM emerged from Chapter 11 bankruptcy in 2009, King and UAW Vice President Joe Ashton (below) said at a press briefing on the contract Tuesday. In these uncertain economic times, we were able to win a tentative agreement with GM that guarantees good American jobs at a good American company, said King in his statement issued Tuesday. When GM was down, our members sacrificed and saved GM. Now that GM is posting strong profits, our members, as a result of this tentative agreement, are going to share in the companys success.
GM will invest $2.5 billion to save or retain about 6,400 jobs in the United States over the four years of the contract. GM will re-open its Spring Hill, Tenn., plant, which was built to exclusively build Saturn models. Just before it was shuttered, it was producing other GM models. Now GM will build two midsize cars at the plant. The UAWs Ashton said many of Spring Hills jobs will go to workers laid off from the plant. About 500 jobs will start at the end of 2012 with another 500 starting for another product by the end of 2013. GM will also add jobs at its Wentzville, Mo., facility for additional midsize truck capacity. Plants in Saginaw, Mich., and Fort Wayne, Ind., already are receiving significant investment for the next-generation of full-size pickup trucks and SUVs. GM also is adding capacity for a compact car. Some jobs will be brought back from Mexico to Michigan. The Janesville, Wis., plant is listed as on standby. The union was not able to save the Shreveport, La., plant, where GM builds small trucks, the Chevrolet Colorado and GMC Canyon.
At the same time that GM adds jobs, it will try to encourage older workers to retire early or leave the company. The automaker will pay eligible workers up to a $10,000 bonus if they retire within the next two years. Skilled-trades workers, such as electricians and pipefitters, will receive a $65,000 bonus if they retire or leave between Nov. 1 and March 31, 2012. Ashton said about 35 percent of GM workers are eligible to retire, though he said because of tough economic times, it is difficult to forecast how many will accept the deal. Shedding older, more expensive workers allows GM to hire entry-level employees at a lower wage. Ashton said only 4 percent of GMs workforce now receives the lower wage. The union would like to see that rise to 40 percent during the life of the contract. Before GMs bankruptcy, that level was capped at 25 percent, a cap that was lifted by the federal government as part of the bailout package.