The United Auto Workers Union announced Wednesday that its workers ratified its negotiated labor contract with General Motors by a 2-to-1 margin, making it the first of Detroit’s three automakers to settle in ongoing talks.
The union said 65 percent of production workers were in favor, and 63 percent of its skilled workers who voted approved the new deal, which went into immediate effect.
“The UAW and GM entered into this set of bargaining as America struggles with record levels of unemployment and an economy that shows little sign of improvement,” said UAW President Bob King. “Because of President Obama’s and the American taxpayers’ backing of our jobs and our companies, we were determined to work together with GM management to grow jobs in the U.S. and to get more Americans back to work and we are doing just that.
“With the continued support and solidarity of our members at GM, we stood strong and not only stopped these proposed givebacks, but we made important gains for our members in this contract,” King added.
GM Chairman and CEO Dan Akerson (left) shakes hands with UAW President Bob King, marking the ceremonial start of labor negotiations between GM and the UAW Wednesday, July 27, 2011 at the Detroit-Hamtramck Assembly Plant.
The new contract essentially trades the promise of generous pay and benefits for GM’s 48,000 hourly workers in exchange for job security and pay gains tied more closely to GM’s financial health, profits and advances in quality.
In a statement, the UAW said the contract will create 6,400 new jobs in the U.S, bring laid-off workers back, and bring back some GM jobs to the U.S. which had been sent to Mexico as well as other parts of the world.
The UAW evidently sees its value to the U.S. economy at a factor of 9-to-1, as that is the ratio of new jobs for each job it says it has fostered (6,400 X 9 = 57,600).
“The 6,400 GM jobs mean another 57,600 jobs will be created in suppliers and other businesses related to the auto industry, since auto manufacturing jobs create and support so many other jobs,” the UAW said.
Under the new deal, entry-level workers will receive “significant gains” in pay, with wages coming to $19.28 per hour over the term of the agreement.
All GM/UAW employees will also get a $5,000 signing bonus, up to $4,000 in “Inflation Protection,” and lump sum payments for “Quality” over the term of the agreement.
The UAW said profit sharing is now improved as well, as the new plan is simpler and more “transparent,” while promising higher payouts.
GM Chairman and CEO Dan Akerson said on a conference call to media and analysts yesterday that he viewed the UAW/GM deal as “win-win.”
The new contract does not significantly increase fixed labor costs, and will help GM “maintain the fortress balance sheet we’ve been working on for the past two years,” Akerson said.
Akerson concurred with the UAW that the new “more transparent” profit-sharing plan will be lucrative for workers, more equitable, and he noted that hourly workers now enjoy a similar deal salaried workers receive.
“When the company does well, the employees ought to share in the success,” Akerson said.
In digging deeper into the contract’s provisions, Edmunds noted the elimination of the “Job Bank” that guaranteed nearly full pay to laid-off workers, as well as an incentive program encouraging some of the 10,000 GM skilled trades workers who are now under-utilized to retire.
Starting wages for new hires increases about $3 per hour from approximately $14 previously. No cost-of-living adjustments are provided for during the contract’s term, and experienced workers get no base wage increases.
As for profit sharing, Edmunds found that if this year GM earns the $4.7 billion it did in 2010, each worker will receive a check for around $4,000.
GM’s overall increase in labor costs under the new terms is about 1 percent. The company said this will enable it to keep it’s breakeven point at an annual U.S. Seasonally Adjusted Annual Rate of sales of about 10.5 million units.
General Motors Detroit-Hamtramck Assembly Plant employee Elizabeth Adams on the line, working on a Volt.
Edmunds however noted its 2011 SAAR forecast for GM is about 12.6 million units.
Attrition by older employees, high wage earners, and skilled trades workers will help offset the bump in payouts, Edmunds reported, and some of these could receive retirement packages of as much as $75,000.
As for some of those 6,400 new jobs, a large number of them will come from GM’s commitment to reopen a shuttered assembly plant in Spring Hill, TN. New workers will also be added by an extra shift in Wentzville, MO for assembly of a new midsized pickup, and by adding workers at two more Michigan powertrain assembly plants.
Ford and Chrysler
The GM contract was originally hoped by the UAW to be a template for the other two Detroit automakers, which as of yet have not reached agreement, but it has not turned out that way.
Ford reportedly has higher labor costs, and its workers – not forbidden to strike as are the New GM’s workers – are seeking a better profit sharing package, and higher signing bonuses. It is believed Ford may add from 7,000 up to 10,000 new UAW jobs in whatever contract it settles on, which will run through 2015.
Chrysler’s ongoing talks have been tainted by a somewhat contentious air, as its CEO Sergio Marchionne said Chrysler cannot afford to be as generous in making concessions as GM was. Marchionne also publicly censured UAW president Bob King in an open letter not long ago for failing to show up to a meeting. The extended deadline now for Chrysler to come to an agreement with the UAW is Oct. 19.
Win-win
As for GM’s contract, it was not without detractors, but the heads of both GM and UAW are putting on smiles, and saying all is well.
We’ll close with the closing comments King offered in the UAW’s statement:
“Two years ago, GM and Chrysler were hanging by a thread when President Obama stepped in and invested federal funds to help turn the companies and the U.S. auto industry around, protecting the auto supplier base and keeping good-paying jobs in America,” King said. “When GM was struggling, UAW members shared deeply in the sacrifice. The UAW has shown that we are totally committed to helping the U.S. auto companies succeed. GM is prosperous today because of its workers. It’s the workers and the quality of the work they do, along with the sacrifices they made, that have helped returned this company to profitability. Now that GM is posting profits again, our members are sharing in the success, while ensuring GM’s continued profitability.”
UAW, AutoObserver, Automotive News.
This entry was posted on Friday, September 30th, 2011 at 5:55 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
+6
Sep 30th, 2011 (7:25 am)Good news! I think profit sharing is the best thing a company can do, it is definitely win-win for both sides. If profits go down then the company has better chance of recovery by having reduced payout. Workers are encouraged to be more innovative and productive because they know that they will be rewarded as the company makes more profit. I am lucky enough to work for such a company and last spring’s bonus was extremely well appreciated.
+2
Sep 30th, 2011 (7:54 am)Way to go! I hope GM can make more competitive vehicles like there Asian counter parts and show what this company is all about especially fuel efficiency but by not sacrificing there quality for future vehicles like the Volt. Though if GM wants to make Volts in China they better not. 1. Sacrifice the safety quality of the vehicle or 2. Don’t sell the Volt from China to the US but if they do? They better be as good as Gen 1 though I rather see cars be made here in America to spur job growth not by sending off jobs to China if you know what I mean by! More jobs sent off to China means less job growth and fewer jobs for the people to make a living by earning money through there daily lives such as entertainment and most importantly food and shelter. Last but not least I wouldn’t mind seeing originality and more creativeness when it comes to new cars and trucks in the future who knows this could be a new golden era since the 50′s and 60′s and no I was not born in these eras I was born in the late 80′s.
+14
Sep 30th, 2011 (8:08 am)If the Volt is so successful that the demand continues to exceed the supply, it is time for GM to reopen another idle assembly plant and expand the Voltec models. Then GM can fulfill two goals: offer more Voltec vehicles in America to reduce oil dependency, and create more jobs (or rehire more workers).
I wish GM all the success it needs to recover its leadership and recover America.
Raymond
+2
Sep 30th, 2011 (8:42 am)Sorry to be negative on a TGIF morning, but I don’t understand why we still have unions. I’m glad they came to an agreement, but I still think the wages, bonuses, and benefits are significantly inflated for UAW workers vs. the average non-union worker. At least the jobs bank is gone. OMG that was the most ridiculous thing ever. Even my friends that were in it thought it was a joke. They would have pig roasts & play putt putt while getting paid 95% of their salary. Technically they were supposed to be taking classes, but they had already taken every class twice at that point.
How does their bonus program work? The article said $4000/employee, but is it weighted for higher paid workers, or does the janitor also get a $4000 check?
Sep 30th, 2011 (10:47 am)Without unions we would not have highly paid, highly pampered union bosses and union bureaucrats who live a lavish life style paid for by the hard working average union member. These hard working union members are “brain-washed” into believing they have to have a union to protect themselves from the “man”. Same logic you see in politics. Plus, union bosses get great support from politicians who see the union bank accounts as easy cash assets for their re-election.
+3
Sep 30th, 2011 (10:49 am)The contract is definitely good for GM in that it gives the company a very long period of lower labor costs. Basically the auto workers are now paid at roughly the rate of other manufacturing workers. The contract with Ford seems pretty much done, with the union just waiting for the vote total from the GM contract before signing off. I guess 63% is a good enough number for this.
It will be interesting to see what the transplants do. The increasing strength of the yen, coupled with the relatively high pay scale and job banks maintained by the transplants, means we’re moving to a point where the the domestic automakers are opening up a decided labor advantage. Honda and Toyota will have to do something.
+3
Sep 30th, 2011 (10:53 am)DonC says: “Honda and Toyota will have to do something.”
————————-
They will respond like always by making great vehicles that sell very well. I would be surprised if they do anything very differently than they are currently doing. Labor relations with their workers are not in the “victim vs owner” class like it is elsewhere in America.
+4
Sep 30th, 2011 (10:58 am)I think you meant the rate of other auto company manufacturing workers or other UAW workers. The guys & gals that work in our manufacturing plant get nowhere near the salary or benefits of these UAW people, but they seem to be happy and doing well. They dont have to pay union dues, or deal with the union BS. Plus, if they do well at their job they will get rewarded w/out any UAW red tape. The ones that don’t do well get let go, (no red tape), and this makes the other workers happy as well.
+3
Sep 30th, 2011 (11:00 am)So, when GM builds vehicles in China, Mexico, Canada, they don’t pay UAW wages correct? Well, Mr. UAW, maybe you should think about that one for a while. Would you rather have no job, or a job that pays 20% less than now?
The only time the UAW makes ‘concessions’ is when they are forced to do so. Spin it any way you like, Mr. UAW, y’all are thugs forcing outrageous wages through intimidation.
BTW, I know a janitor that works at Arlington GM. They make $70k/year.
+5
Sep 30th, 2011 (11:05 am)I can remember back (years and years before the bankruptcy and bail-out) that each time GM got “taken to the cleaners” by the UAW they still repeated the “its a win-win” deal. Maybe this time it is different. I don’t know. But I do know that if the past is any judgement of the future, the UAW will not be satisfied until they recoup all the “losses” suffered the last three or four years.
We can hope that both parties have “learned their lesson”, but somehow I doubt it. Here’s hoping………..?
+5
Sep 30th, 2011 (11:42 am)So much the better. I’m always happy to see some of my fellow Americans have a chance to make a decent living. Let’s get on with it.
“New midsized pickup”? That sounds exciting. Do we have any more on that? Maybe that’s CaptJack’s Voltec pickup. I can hope, can’t I?
+7
Sep 30th, 2011 (11:46 am)#2
If we are stupid enough to buy cars made in China, we are going to get exactly what we deserve. Nobody points a gun at anybody’s head and forces them to buy an imported car. We are very self destructive people when it comes to our consumer buying decisions IMHO. We have nobody to blame but ourselves.
+5
Sep 30th, 2011 (11:51 am)#4 kdawg Sorry to be negative on a TGIF morning, but I don’t understand why we still have unions. I’m glad they came to an agreement, but I still think the wages, bonuses, and benefits are significantly inflated for UAW workers vs. the average non-union worker. At least the jobs bank is gone.
Unions are great; except when they become too strong and choke the life out of a business. I agree that the jobs bank was extreme. I don’t think $14 now $17 starting wage is asking too much for today’s cost of living. Profit sharing programs work best; because they give workers the best incentive to produce products that people will continue to buy, unless these products are made too quickly without emphasis on top quality. I have seen lazy, disrespectful workers get away with murder; so to speak and get to keep their job or be rehired because they are Union. On the other-hand; without Unions, you can be totally at the mercy of your employer. The UAW was too strong and helped cripple U.S. auto manufacturing. To be globally competitive; the UAW needs “moderation” if they want to keep more jobs here in the Great USA JMO.
Sep 30th, 2011 (12:54 pm)Politics again? Think I’ll sit this one out.
… and the crowd goes wild …
+10
Sep 30th, 2011 (1:08 pm)Not really politics. Union bashing mostly. As if an employee earning a decent living when a company is profitable was a shame.
Truth of the matter is : the more money you put in the hands of the midlle class, the better it is for the economy. When the rich is getting super-rich, it doesn’t help the economy at all. He just piles up the money.
When an employee earns 4000$ more a year, he/she will spend most of it helping the economy ten-fold.
It truly is a win-win situation for all. Even if a janitor at GM earns more than me with a bachelor degree, which is a little frustrating, it still is best for the economy. I wish all companies would give back generously to the employees. Everybody would just be better off, including the rich that would be living in a more secure world.
+2
Sep 30th, 2011 (1:45 pm)It takes a lot more than just re-opening an assembly plant. GM has lots of spare capacity at Hamtramck for the Volts, they can easily add another shift and double output.
I am sure they are working on other Voltech models, and when the time comes will upgrade an assembly line to make them.
+2
Sep 30th, 2011 (2:39 pm)I guess that’s why English is called English Language Arts now. More art than function.
+2
Sep 30th, 2011 (2:58 pm)No I meant the second tier of UAW workers and other manufacturing workers.
Neither Toyota nor Honda are making great vehicles. Both have made reliable vehicles with good resale value but no one would ever have called a Camry great, and the downward trend has accelerated as other car companies have moved the bar up.
But the main point would be that Toyota and Honda simply can’t continue as they have. Toyota in particular makes far too many of its parts in Japan. At 77 yen to the dollar they can’t remain price competitive. Labor in the US isn’t a big part of their compromised competitive position but clearly they are going to have to look at it. FYI Toyota probably has the biggest jobs bank of any manufacturer in the US, which should suggests that the UAW wasn’t and isn’t the great bogey man it is often portrayed to be and that Toyota can cut some labor costs.
+1
Sep 30th, 2011 (3:11 pm)Sometimes they are the same. It is hardly a coincidence that those states which are downright hostile to unions are those states with a history of slave based economies. It’s just capital vs. labor attitudes which have persisted despite changed circumstances.
On the other hand, it’s hard to imagine why you’d need a union in a state like CA. There are so many restrictive state laws that it’s hard to fathom why anyone would need a union. Plus even cleaning women make $20/hr, though that doesn’t include benefits. No doubt there are a few cases of where a union might help, but the big problem with unions is the public employee unions. The unions support candidates and then turn around and negotiate deals with the candidates they’ve just helped elect. Guess what? Those agreements are very favorable to the union members. It’s pathetic and horribly corrupting, and it’s the main reason so many local governments are in such dire fiscal straits.
+1
Sep 30th, 2011 (3:43 pm)I think $14 is too much, and definately $17. What’s wrong with minimum wage? Most of our guys start out from $8~$12/hour. If they work out, and are doing a good job, they are quickly given merit raises to keep them. If they are not very good, they are either fired, or left at their wage. Note, these are new-hires, meaning green-horns. Obviously if someone has more skills, they deserve more money, but that is what you negotiate at the interview. It shouldn’t just be an automatic value.
Not in the year 2011. With today’s litigious environment, employers can’t get away with much if anything at all. Most cases, they are on the defense from disgruntled employees over the most frivilous things.
+1
Sep 30th, 2011 (3:52 pm)Really? So all the college kids with 4 year degrees should just quit that nonsense and become UAW janitors? How is that good for society? If you reward the people that do less, what incentive is there to do more. That’s what a lot of my friends who were forced into the UAW hate. They can work their a55 off, but they are held back by all the sloths around them, and will never get any recognition or merit raises. All of the funds are used up to pay $70K to janitors.
+2
Sep 30th, 2011 (6:32 pm)“pay gains tied more closely to GM’s financial health, profits “
In other words, it’s still not pay per performance and the College educated will get the same pay as the the slacker without an education.
“entry-level workers will receive “significant gains” in pay, with wages coming to $19.28 per hour over the term of the agreement”
“employees will also get a $5,000 signing bonus, up to $4,000 in “Inflation Protection,” and lump sum payments for “Quality” over the term of the agreement.”
“promising higher payouts.”
Maybe it’s me but how in the hell does all the above equate to getting the price of the products down?
A $5,000.00 signing bonus?!?!? WTF! Be lucky your azz has a damn JOB!
Inflation Protection?!?! WTF?!?!? Like anyone can predict what the inflation will be? What happens when there is no inflation? Or what happens if the the opposite of inflation? Does the inflation protection go down too, get’s decremented from their check? I bet not!!!
IMHO, just more crap for the UAW to strong arm GM later.
+4
Sep 30th, 2011 (6:50 pm)#20 kdawg I think $14 is too much, and definately $17. What’s wrong with minimum wage? Most of our guys start out from $8~$12/hour.
Well, I guess you get what you pay for; we are talking about “real jobs” for dependable dedicated people people looking for a fair wage for an honest days work, not minimum wage or $10/hr In and Out burger job. It is in GM’s best interest to have lower turn-over for these starting positions IMO. With a fair starting wage you will have a better pool of applicants to choose from and Probational periods always give you a way to get rid of anyone that doesn’t deserve the job.
Kdawg-Not in the year 2011. With today’s litigious environment, employers can’t get away with much if anything at all. Most cases, they are on the defense from disgruntled employees over the most frivilous things.
Of coarse there are Labor laws and I’m certainly not blind to the fact that there are some real problems with Unions having too much power. Despite being 2011; workers can be at a tremendous disadvantage threw intimidation and other circumstances where having a Union advocate can be better for the employee as well as employer without having to have lawsuits. Believe me, I’ve heard of very bad management as well as Union over-kill. The Post Office is one example of very bad management and Union out of control. People just want a fair wage IMHO.
+1
Sep 30th, 2011 (7:38 pm)Im talking about real jobs. Welders, assemblers, machinist, electricians, pipe fitters. The ones that have put the time in have the higher wages. The ones just starting, not so much. Maybe the cost of living is cheaper where I live. I think its in GM’s interest to be able to turn people over that are innefective, rather than have unions protect them. In the current economy, no one is turning down jobs.
Oct 1st, 2011 (9:03 am)It’s always nice to see hot women pictured with Volts. (picture number 2)
+1
Oct 1st, 2011 (1:54 pm)I say your a liar….
Janitors do not make 70K per year at Arlington GM… I know a test driver for GM 32 years that didn’t make that much.
Your suggesting that janitors are making $35/hr which is totally false.
It’s lies like this that support false perceptions .. of which there are too many of.
+5
Oct 1st, 2011 (6:47 pm)OT-
After 208 days, the boss has put our VOLT demo car up for sale. He didn’t put a price on it. He wants to see what kind of offers come in. It’s a Black/Black with Polished Wheels, Leather + Heated Seats Pkg., Navigation, Bose, Backup Camera and Sensors, and only 1035 miles on it! Any takers in SoCal ?
Oct 2nd, 2011 (11:01 am)Good little story about UAW finances.
http://www.autoobserver.com/2011/09/report-exposes-shaky-uaw-finances.html
Looks like they needed this deal with GM to help grow their dues-base of new and re-hired workers just as much as GM needed to make for the two-tier labor rates.
Will the UAW exist in the year 2020? 2030?
+2
Oct 2nd, 2011 (12:25 pm)OT: Florida-Meet-and-Greet-on-October-16-national-plug-in-day, 10AM ….For location go to:
http://gm-volt.com/forum/showthread.php?9331-Florida-Meet-and-Greet-on-October-16-national-plug-in-day
Oct 2nd, 2011 (8:46 pm)Bonaire,
So the Union bosses may have to give up their condos on the shore, so sad.
+1
Oct 3rd, 2011 (9:57 am)BLIND GUY ++++
Thanks for your thoughtful commentary